Increase in National Insurance thresholds from 6th July 2022

On 23rd March 2022 in the Spring Statement 2022, the government announced an increase in National Insurance primary thresholds affecting the 2022 to 2023 tax year.  These changes will take effect from 6th July 2022, resulting in employees paying National Insurance contributions on less of their income.

The Primary threshold from 6th July 2022 to 5th April 2023 will be increasing to £242 per week and £1,048 per month, equivalent to £12,570 per year (increased from £9,880 per year).  As a result, employees will pay 13.25% less National Insurance on the difference of £2,690 per year (a reduction of up to £6.85 per week / £29.70 per month).

The National Insurance lower profits limit for the self-employed is also increasing in line with the changes for employees. The annual lower profits limit will be set to £11,908 for 2022 to 2023. This is equivalent to 13 weeks of the threshold at £9,880 and 39 weeks at £12,570, mirroring the position for employees. Self-employed people will also no longer be required to pay Class 2 National Insurance contributions on profits between the Small Profits threshold (£6,725) and Lower Profits limit (£11,908), but still be able to build National Insurance credits.