NIC Rates and Allowances for 2022-23

Posted on 5th April 2022 by Streets - Payroll

HMRC has published an updated version of the rates and thresholds for employers following the spring statement. The main changes relate to the increases in the National Insurance (NIC) thresholds. This will see the NIC threshold increase from £9,880 to £12,570 from 6 July 2022 and result in the alignment of the Primary Threshold (PT) for Class 1 NICs and Lower Profits Limit (LPL) for Class 4 NICs, with the personal allowance of £12,570.

The PT and LPL will be £9,880 (as previously announced) from 6 April 2022 – 5 July 2022 and £12,570 from 6 July 2022 – 5 April 2023. This means the LPL will be £11,908 for the 2022-23 tax year which is equivalent to 13 weeks of the threshold at £9,880 and 39 weeks at £12,570. HMRC’s document also includes weekly and monthly figures to help calculate weekly / monthly pay.

The increases in NICs of 1.25% - first announced last year - also took effect from April 2022. These increases will be ring-fenced to provide funding for the NHS, health and social care.

The increases will also apply to Class 1 contributions (paid by employees) above the primary and secondary thresholds. Employers should ensure that they have prepared for the increase as these changes will increase wage costs from April 2022.

All existing NICs reliefs to support employers will continue to apply. In addition to the employment allowance, this includes the following:

employees under the age of 21
apprentices under the age of 25
qualifying Freeport employees
armed forces veteran

There are also corresponding increases in Secondary Class 1 NICs (paid by employers) and Class 4 NICs (paid by the self-employed).

No Advice

The content produced and presented by Streets is for general guidance and informational purposes only. It should not be construed as legal, tax, investment, financial or other advice. Furthermore, it should not be considered a recommendation or an offer to sell, or a solicitation of any offer to buy any securities or other form of financial asset. The information provided by Streets is of a general nature and is not specific for any individual or entity. Appropriate and tailored advice or independent research should be obtained before making any such decisions. Streets does not accept any liability for any loss or damage which is incurred from you acting or not acting as a result of obtaining Streets' visual or audible content.

Information

The content used by Streets has been obtained from or is based on sources that we believe to be accurate and reliable. Although reasonable care has been taken in gathering the necessary information, we cannot guarantee the accuracy or completeness of any information we publish and we accept no liability for any errors or omissions in material. You should always seek specific advice prior to making any investment, legal or tax decisions.