Increase in National Insurance thresholds
In the Spring Statement 2022, the UK Government announced an increase in National Insurance thresholds affecting the 2022 to 2023 tax year.
We want to take the opportunity to remind our clients that the threshold changes will take effect from 6th July 2022, meaning employees will pay National Insurance contributions on less of their income.
The primary threshold from 6th July 2022 to 5th April 2023 will be £242 per week and £1,048 per month, equivalent to £12,570 per year (increased from £9,880 per year). See the guidance Rates and thresholds for employers 2022 to 2023, ‘Class 1 National Insurance thresholds’ for further information.
The National Insurance lower profits limit for self-employed people has also increased in line with the changes for employees. The annual lower profits limit is now set to £11,908 for 2022 to 2023. This is equivalent to 13 weeks of the threshold at £9,880 and 39 weeks at £12,570, mirroring the position for employees. Self-employed people are also no longer required to pay Class 2 National Insurance contributions on profits between the Small Profits threshold (£6,725) and Lower Profits limit (£11,908), but they are still able to build National Insurance credits.
If you require assistance with these changes, our Payroll Department is here to help. Call us on 01384 376964
Folkes Worton LLP Chartered Accountants
Accounting for the Future