National Insurance update

The UK government has announced reductions to National Insurance rates and the cancellation of the Health and Social Care Levy as a separate tax.

The key changes are:

  • National Insurance contribution (NIC) 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

HMRC have previously asked employers to include a generic message on payslips for the tax year (2022 to 2023) to explain the reason for the NICs uplift. This message will no longer  be applicable from 6‌‌‌‌‌‌ ‌‌November 2022, and it should be removed from payslips from this date.

If you use HMRC Basic PAYE tools this software will be automatically updated to take account of these changes.