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Employers need to be aware of the reduction in National Insurance from 06 November 2022


Payroll software providers have been kept busy recently. Last month it was announced that in-year reductions to National Insurance rates will come into force from Month 8 i.e. 06 November 2022.

Employers need to ensure their software is up to date. The key changes are:

  • National Insurance contribution rates will reduce by 1.25%. This will affect Class 1 contributions for both employees and employers and also Class 1A and Class1B contributions on taxable benefits. This effectively reverses the increase which was introduced in April 2022.

  • From 06 November 2022 employers will also need to remove the message, if it was added to paylsips, explaining the temporary National Insurance contributions uplift.

  • The Health and Social Care Levy of 1.25%, which was due to be introduced in as a separate tax in April 2023, has been cancelled.

HM Revenue & Customs are aware of the tight deadline for software providers to make these changes which might cause problems in implementing this in time. Where a later correction is needed employers can submit a revised Full Payment Submission (FPS).

If you are using a desktop version of software, please ensure that from 06 November 2022 this is the revised and latest of your payroll software. We anticipate that Cloud Products should be updated automatically. If you have not received an update or are unsure if the version you are using is the correct one, please contact your software provider for further information.

If you use HMRC’s Basic PAYE Tools you need to install the update (version 22.2 or later) to ensure National Insurance is calculated correctly from Month 8 onwards. This will be available to download from 04 November 2022.

If you need any advice Yvette, our payroll manager, will be on hand to help. Please do not hesitate to get in touch.

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