National Insurance changes once again – What you need to know

The National Insurance (NI) rise is to be reversed following changes in September’s mini-Budget.

This increase in NI, which was to be enshrined in law within the Health and Social Care Levy from next April, was to raise approximately £13 billion a year to fund health and social care services

Since April this year, workers and employers have been paying an extra 1.25 percentage points in NI, but now this rate change will be reversed from 6 November.

Workers had already received some support with the additional costs of NI thanks to an uplift in the Primary Threshold to £12,570 earlier this year.

This brought the point at which an employee starts making National Insurance Contributions (NICS) in line with the basic rate of Income Tax.

Unfortunately, similar support wasn’t available to employers for their contributions and so they have been paying considerably higher NI costs this year.

This reversal of the rates should help businesses to manage their employment costs, while also freeing up essential cash flow within their operations.

Your payroll systems must be up to date and make the correct deductions so that your business and its employees aren’t disadvantaged, and you remain compliant with the latest NIC legislation. If you require any assistance, speak to us.