In April it went up. In July it went down. And with a Conservative leadership contest in full swing, who knows where it will go next? Here’s a quick recap of the NI Hokey Cokey.
National Insurance (NI) has been pinballing around for much of 2022. In April, the Health and Social Care Levy was introduced which, technically, is a separate entity to NI. But to speed things up, this year it manifested itself as a 1.25% addition to NI because that was an easier option, administratively speaking, than introducing an entirely new levy.
Next April, the levy will be formally introduced (at 1.25%) and will be removed from NI.
Changes from the Spring Statement
Back when Rishi Sunak was Chancellor, he announced a new primary threshold for NI payments which would take effect this July. The old threshold of £9,880 has been replaced with a new higher threshold of £12,570. According to the Treasury this will benefit around 30 million people, saving a maximum of £332 if you ignore the 1.25% NI social care increase. It will remove 2.2 million from paying NICs entirely.
What are Tory leadership candidates promising?
The Conservative leadership contest has rather muddied the NI waters. Unsurprisingly, Rishi Sunak plans to stay the course with his NI increase. He was, after all, the person who introduced it. Jeremy Hunt will retain the increase too but other candidates have promised to reverse it and other tax rises.
Liz Truss and Tom Tugendhat have said they will scrap the NI rise. Sajid Javid did too before pulling out of the contest. Penny Mordaunt, Suella Braverman and Kemi Badenoch have, at time of writing, spoken of the need to lower taxes without yet spelling out which ones.
Although the contest could be decided earlier, we should have a new prime minister in place by 5 September. After that, there remains a very real chance that busy payroll teams could become even busier implementing another NI change.
We can help make implementing that (and every other) tax change easier. To find out how, talk to us.