Increase in National Insurance thresholds – employers need to be vigilant
Back in March it was announced that there would be an increase in National Insurance thresholds in the current tax year.
The threshold changes will take effect from 6 July 2022, which actually means that employees and the self-employed will pay a little less National Insurance.
Those who are self-employed will also no longer be required to pay Class 2 National Insurance contributions on profits between the small profits threshold (£6,725) and lower profits limit (£11,908), but still be able to build National Insurance credits.
Information about how this will affect the self- employed will be published later but information for those employed can be found in rates and thresholds for employers 2022 to 2023 and Class 1 National Insurance thresholds.
If you use PAYE software and it does not update automatically, please obtain the relevant update from your provider. If you use Basic PAYE tools, we understand that this software will be updated to take account of National Insurance threshold increases from 4 July 2022. Therefor HMRC are asking users to wait until after this date to run payroll for any payments made on or after 6 July 2022.