NATIONAL INSURANCE INCREASE 2022
ACCOUNTANTS IN MANCHESTER
Our article to National Insurance for the self-employed covers the basics. Read on to find out how your profits affect the amount of NI you'll pay, and how you can make payments to HMRC.
What is National Insurance (NI)?
From April 2022-23, the NI rate will rise.
From 6 April 2022 to 5 April 2023 National Insurance contributions will increase by 1.25%. This will be spent on the NHS and social care in the UK.
The increase will apply to:
- Class 1 (paid by employees)
- Class 4 (paid by self-employed)
- secondary Class 1, 1A and 1B (paid by employers)
The increase will not apply if you are over the State Pension age.
If you’re employed
You pay Class 1 National Insurance contributions. The rates for most people for the 2021 to 2022 tax year are:
|Your pay||Class 1 National Insurance rate|
|£184 to £967 a week (£797 to £4,189 a month)||12%|
|Over £967 a week (£4,189 a month)||2%|
You’ll pay less if:
- you’re a married woman or widow with a valid ‘certificate of election’
- you’re deferring National Insurance because you’ve got more than one job
Employers pay a different rate of National Insurance depending on their employees’ category letters.
How to pay
You pay National Insurance with your tax. Your employer will take it from your wages before you get paid. Your payslip will show your contributions.
If you’re a director of a limited company, you may also be your own employee and pay Class 1 National Insurance through your PAYE payroll.
If you’re self-employed
You may be able to pay voluntary contributions to avoid gaps in your National Insurance record if you:
- have profits of less than £6,515 a year from your self-employment
- have a specific job (such as an examiner or business owner in property or land) and you do not pay Class 2 National Insurance through Self Assessment
If you have gaps and do not pay voluntary contributions, this may affect the benefits you can get, such as the State Pension.
If you have a specific job and you do not pay Class 2 National Insurance through Self Assessment, you need to contact HMRC to arrange a voluntary payment.
If you’re employed and self-employed
You might be an employee but also do self-employed work. In this case your employer will deduct your Class 1 National Insurance from your wages, and you may have to pay Class 2 and 4 National Insurance for your self-employed work.
How much you pay depends on your combined wages and your self-employed work. HM Revenue and Customs (HMRC) will let you know how much National Insurance is due after you’ve filed your Self Assessment tax return.
There are different National Insurance rules for:
- company directors
- landlords running a property business
- share fishermen for example you’re working on a British fishing boat but not under a contract of service
How can we help?
We are here to support you with your personal tax and company accounting needs. We provide self-assessment tax returns from £120 per year, so if you could do without the headache of completing it yourself and managing it throughout the year, as well as having a professional eye on your business finances, then get in touch with us
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Reach out to our professional and friendly team at Parker Whitwood Accountants in Manchester using the contact information below.