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The legislation to abolish the 1.25 percentage point increase in the rate of National Insurance Contributions (NICs) paid by workers, employers and the self-employed was already in progress when the recent Budget U-turns were being made.
The reduction therefore continues to go ahead and the rate of NICs on salary payments made on or after 6 November 2022 reduces to 12% for employees on earnings between £1,048 and £4,189 a month and 2% on earnings thereafter. Employer contributions will reduce to 13.8% on earnings in excess of £758 per month from 6 November 2022.
As NICs for company directors and the self-employed is based on annual earnings and profits, the rates for 2022/23 are now to be based on a proportionate or average rates.
The rate of NICs for company directors will be set at 12.73% on earnings between £11,908 and £50,270 and 2.73% on earnings thereafter. Class 4 NICs payable by self-employed individuals will be 9.73% on profits between £11,908 and £50,270 and 2.73% on thereafter.
Employers will need to make sure that they update their payroll software so that the correct amount of NICs are paid on salary payments made after 5 November 2022.
Brearley & Co Accountants are pleased to offer a free, no obligation, initial consultation with one of our experts who will be happy to discuss your business needs and how we can help you.Contact