National Insurance Contributions Increase

National Insurance contributions are due to increase when the Health and Social Care Levy comes into effect in the UK (England, Scotland, Wales and Northern Ireland) on 6 April 2022.

The increase in contributions will be used to help fund the NHS, health and social care.

What the changes are and when they will affect you

  • For tax year 6 April 2022 to 5 April 2023 – Employer Class 1, employee Class 1, Class 1A, Class 1B and Class 4 National Insurance contributions will increase, for one year, by 1.25 percentage points.
  • From 6 April 2023 – The National Insurance contribution rates will go back down to 2021 to 2022 levels, and the levy will become a separate new tax of 1.25%.

How the levy will affect you Between 6 April 2022 and 5 April 2023

If you are an employer, employee or self-employed (and below the State Pension age), you will pay the 1.25 percentage points increase in National Insurance contributions.

From 6 April 2023

The separate levy of 1.25% will apply to the same amounts for the following classes of National Insurance contributions:

  • Class 1 that are above the primary and secondary thresholds
  • Class 1A and Class 1B for employers
  • Class 4 for the self-employed

All existing National Insurance contribution reliefs will apply to the separate levy for –

  • employees under the age of 21
  • apprentices under the age of 25
  • qualifying Freeport employees
  • those eligible for the Employment Allowance
  • armed forces veterans

If you’re an employer –

  • If your business pays Class 1, Class 1A or Class 1B National Insurance contributions, you’ll need to start paying the 1.25 percentage points increase in contributions from 6 April 2022. You’ll then need to pay the separate 1.25% levy from 6 April 2023.
  • You may also have to pay the separate levy from 6 April 2023 for employees who are over State Pension age.
  • Those liable to pay National Insurance contributions will also be liable to pay the levy. Existing employer reliefs and allowances that apply to National Insurance contributions will also apply to the levy.
  • Earnings on which National Insurance contributions are calculated will also be used to calculate the separate levy.

**Information will be made available later in 2022 on how to report the levy from April 2023**

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