National Insurance Contribution Changes
Who pays National Insurance?
Currently anyone aged 16 up to retirement age pays NI contributions if you are earning over £12,570 per year employed or £6,725 a year profit, self-employed.
There are 4 types if National Insurance:
- Class 1 – Payable by employees and employers
- Class 2 – Payable is you are self-employed
- Class 3 – Payable as a voluntary contribution to avoid gaps in a NI record
- Class 4 – Payable by the self-employed on profits above a certain level
Changes to National Insurance
The current tax year has seen our government make several changes to National Insurance contributions as they implemented a health and social care levy.
The rates were increased in April and the thresholds in July.
Now there is a reversal due from 6th November 2022 as the new chancellor has scrapped the planned changes.
The current NI rates and thresholds can be found here: National Insurance rates and categories: Contribution rates – GOV.UK (www.gov.uk) This web site will be kept up to date and will change in November.
How does this impact your payroll?
As ever it is vital that you know the appropriate rates and thresholds when you run your payroll. It’s also vital to ensure your payroll software is up to date and correct. Keep in touch with your software supplier and read all their correspondence regarding these changes. You will also need to keep your software up to date by loading the necessary changes after your October payroll and before November.
Keeping on top of the changes can be very time consuming, particularly in smaller businesses where you wear multiple hats. If you would like to outsource this, leaving you free to manage work more central to your organisation, please do get in touch. Our Payroll team are ready for the changes and are experts in their field.
You can find out more about how we can help HERE or contact our payroll manager for further information: firstname.lastname@example.org