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For once, National Insurance was at the forefront of the announcements in the Chancellor’s Statement.

• From April 2022, the Employment Allowance, which reduces an employers NIC bill, will increase from £4,000 per year up to £5,000.

• From 6 July 2022, the point at which an employee will start to pay Class 1 NIC aligns with the Income Tax threshold of £12,570. This means that from 6 April to 5 July 2022 an employee can earn £190 per week without paying Class 1 NIC. Between 6 July 2022 and 5 April 2023, this weekly threshold increases to £242.

From April 2023 onwards, employees will be able to earn £242 a week, equivalent to £12,570 a year without paying any Class 1 NIC. This announcement is expected to benefit 30 million employees, 70% of whom should still find themselves better off even after the new Health and Social Care Levy is introduced (see below).

• Self employed people pay Class 4 NIC’s on an annual basis. The Chancellor also announced that they would see a similar increase in their limits for the upcoming 2022/23 tax year, which means that they will not pay any Class 4 NIC on the first £11,908 of their business profits. From April 2023 onwards, they will not pay any Class 4 NIC on the first £12,570 of their business profits.

• Self employed people also pay Class 2 NIC’s if their business profits are over a certain limit. For the upcoming 2022/23 tax year this limit has been increased to £11,908 with a further increase up to £12,570 set to kick in from April 2023 onwards.

The following announcements were made in the 2021 Autumn Budget, but kick in from April 2022 onwards:

• The Government has legislated for a new 1.25% Health and Social Care Levy to help fund the NHS and Social Care.

This levy will initially apply to those who pay Class 1 (Employees and Employers) and Class 4 (SelfEmployed) NIC’s.

The levy will be added to the main and additional rates of Class 1 and Class 4 National Insurance from 1 April 2022.

From April 2023, once the systems are updated, the levy will be separate from National Insurance Contributions and will also be applied to working individuals above State Pension age.

National Minimum Wage

From 1 April 2022 the National Minimum Wage rates are:

• employees aged 23 and over: £9.50
• employees aged between 21-22: £9.18
• employees aged between 18-20: £6.83
• employees aged between 16-17: £4.81
• apprentices up to age 19 or in their first year of apprenticeship: £4.81 (unless rates specified in apprentice training contract)

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