National Insurance threshold increases from 6 July
Changes to the National Insurance threshold come into effect from 6 July 2022.
During the Spring Statement in March, the Chancellor increased the National Insurance threshold for the 2022/23 tax year. From 6 July, the threshold will increase from £9,880 to £12,570. This brings NICs in line with income tax thresholds for the first time.
The increase in the threshold will see employees and those self-employed pay less NICs on their income or profits. As a result, the average saving per taxpayer is around £267 for the rest of the 2022/23 tax year.
Following the introduction of the 1.25% health and social care levy, the NI rate currently sits at 13.25%. The surcharge took effect on 6 April earlier this year, in a bid to raise funds for the NHS and health and social care.
Personal Taxes
Although the National Insurance threshold will increase, the tax burden is still the highest it has been for 40 years. Several factors have contributed to this. One being the Chancellor freezing the personal allowance threshold, which will remain frozen for three years until 2025/26.
In an attempt to reduce taxes, the Chancellor announced in the Spring Statement a proposed reduction in the basic rate of income tax. The reduction would see the income tax basic rate reduced from 20% to 19%.
The proposed reduction is due to take place before the end of parliament in 2024. However, there have been calls to introduce the reduction earlier than planned, as the cost of living crisis continues.
Contact us
For more information, feel free to contact our team.
Call us on 01704 891676
Email us at info@stseurope.co.uk
Send us a message via our contact page
Visit the government website for full guidance on rates and allowances.
This guide is an informative piece and does not constitute tax advice for individual matters.
