The Government has set out that from 6 April 2022 to 5 April 2023, National Insurance contributions will increase by 1.25 percentage points.  The increase will be spent on helping the NHS, and social care in the UK, to get back to a position it was in before the pandemic.

The increase will apply to:

  • Class 1 (paid by employees)
  • Class 4 (paid by self-employed)
  • Secondary Class 1, 1A, and 1B (paid by employers)

National Insurance Rates
The current rate for employees is 12%.  Therefore, from April 2022 to April 2023 NICs for employees will be 13.25%.  The current rate for employers is 13.8%.  Therefore, from April 2022 to April 2023 employers’ NICs will be 15.05%  Then from April 2023 national insurance contributions will return to their old rates.  But, you won’t be any better off, because you’ll be hit by a new ‘Health and Social Care Leby’ at the same 1.25%.

Business Impact
These latest National Insurance increases will have a significant impact on hardworking individuals and small businesses which are still recovering from the unprecedented effects of the pandemic.  Federation of Small Businesses Chair Mike Cherry said, ‘”These hikes will have business owners and sole traders feeling demoralised at the point when they’re trying to recover from the most difficult 18 months of their professional lives.  For those thinking about starting up, they send completely the wrong message.  The FSB is recommending an increase to the Employment Allowance, which entitles small firms to a discount on their National Insurance contributions, to £5,000 to free up funds for investment and expansion.

Job Vacancies
Despite all of this Two Rivers are still seeing a significant increase in job vacancies across the UK with many of our clients increasing salaries and improving staff benefits to attract the right skills for their business in a market that is still driven by severe candidate shortages.

There is a more detailed guide about NICs on the UK Government website.

Two Rivers: 23rd March 2022