Increase in National Insurance Contributions from April 2022
From April 2022, there will be a temporary 1.25% increase in Class 1 primary (employee), Class 1 secondary (employers) and Class 4 (self-employed) NIC.
From April 2023, these increases will be legislated separately as a “NHS Levy” and NIC rates will return to 2021/22 levels. The NHS Levy will also extend to individuals working above state pension age, who are currently exempt from NIC :-
| Type Of NIC | Thresholds | 2021/22 Rates | 2022/23 Rates | 2023/24 Rates |
|---|---|---|---|---|
| Employees (Class 1) | £9568 | 12%/2% | 13.25%/3.25% | 12%/2% plus 1.25% NHS Levy |
| Employers (Class 1) | £8840 | 13.8% | 15.05% | 13.8% plus 1.25% NHS Levy |
| Self employed (Class 4) | £9568 | 9%/2% | 10.25%/3.25% | 9%/2% plus 1.25 NHS Levy |
From 6th April 2022 dividend income will also be subject to the NHS Levy. The £2,000 allowance remains. The additional levy will affect all levels of income as per the table below :-
| Tax Bracket | 2021/22 Rates | 2022/23 Rates |
|---|---|---|
| Basic Rate | 7.5% | 8.75% |
| Higher Rate | 32.5% | 33.75% |
| Additional Rate | 38.1% | 39.35% |
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