Story by C21 Chartered Accountants.
The increases in National Insurance Contributions (NIC) of 1.25%, first announced last year, will take effect from April 2022. These increases will be ring-fenced to provide funding for the NHS, health and social care.
The increases will apply to:
- Employees above the primary and secondary thresholds. This is the NIC that is deducted from your earnings by your employer.
- Employers NIC contributions are paid as part of the regular PAYE/NIC payments unless they are covered by the present £4,000 employment allowance.
- People who are Self-Employed. These contributions are added to your annual Self-Assessment statement if you are Self-Employed.
Existing NICs reliefs will continue to apply, this includes; employees under the age of 21, apprentices under the age of 25, qualifying Freeport employees, armed forces veterans
Jan Hall, Director at C21 Chartered Accountants in Sheffield comments:
“The increases in NIC will mean that many of us will see our take home wages go down in April. Also, for those who run companies and have employees…these changes will increase wage costs from April 2022…With the other increases in cost of living at present, there has been significant political pressure to cancel this increase.”