Early Budget Announcement

Date Posted: 19 November 2022

In an early budget announcement, the government announced yesterday, 22 September 2022 that the 1.25% Health & Social Care Levy increase to National Insurance will be reversed from 6 November 2022 and the separate Health & Social Care Levy, due to be effective April 2023, has been cancelled.

  • National Insurance contribution rates will be cut by 1.25 percentage points for employees, employers and the self-employed, effectively reversing the uplift introduced in April 2022 for the rest of the tax year. This cut will take effect from 6 November 2022 and it will cover Class 1 (both employee and employer), Class 1A, Class 1B and Class 4 (self-employed) NICs.
  • The ring-fenced Health and Social Care Levy of 1.25% due to be introduced from April 2023 will also not go ahead.

This change is set to see over 900,000 businesses pay less in National Insurance and 20,000 stop paying National Insurance all together. The government estimates that this will save individuals £135 on average for the rest of this current tax year and £330 for 2023/24 tax year.

From 6 November employers should remove the previously required generic message on payslips to explain the reason for the National Insurance uplift.

Payroll software should automatically reduce the NI percentage and the generic message from the 6 November effective date.

Full detail on this change will be published by HMRC in due course. National Insurance increase reversed – GOV.UK (www.gov.uk)

If you have any questions please contact your Burgess Hodgson contact or info@burgesshodgson.co.uk