Recap of the year
- Thresholds and rates were set in April 2022
- The Primary Threshold was raised in July 2022
- The September Mini Budget reversed the April 2022 rate uplift, back to 21/22 levels, but kept the higher threshold from July
Mini Budget Update – From 6th November 2022
National Insurance reduced back to 12% for employees
- National Insurance will revert to the pre-April 2022 rate of 12%
- Negates the rise of 1.25% which represented the first year of the Health & Social Care Levy
- Primary Threshold, which changed in July 2022, will remain at the current (higher) level
- This change is not retrospective
National Insurance reduced back to 13.8% for employers
- National Insurance will revert to the pre-April 2022 rate of 13.8%
- Negates the rise of 1.25% which represented the first year of the Health & Social Care Levy
- This change is not retrospective
Directors
- Directors NI is averaged over the entire year
- Directors NI was raised to 13.25% in April 2022
- The rate will be reduced to 12% in November
- The average rate for the tax year is 12.73%
Rates from 6th November 2022
Rates between 6th April – 5th November 2022
Directors Rates (averaged over 22/23 tax year)
Thresholds (including July Update)
FAQ
- Will National Insurance Contributions have to be backdated after July? No, from July onwards the new threshold comes into effect but it is not retrospective.
- Are National Insurance Contributions calculated on the day worked or day paid? NIC’s are calculated on the day paid, not when the employee worked.
- Has the Lower Earnings Limit changed? Yes from 2021/22, no within the 2022/23 tax year; if you would have qualified before, you will still qualify now.
- Are directors treated differently? The PT for directors for the 2022 to 2023 tax year is £11,908 and not £12,570. This applies for the whole of the tax year and not just from 6 July 2022.
For the updates National Insurance guide to SD Worx pay see SDWorx-Pay – National Insurance Contributions (NI) – UK Knowledge for Pay and HR (payhr.uk)