National Insurance rates and thresholds to 5 April 2023 and beyond

National Insurance Contribution rates and thresholds from 6 April 2022 to 5 April 2023 and beyond, as amended by the Emergency Mini-Budget and Autumn Statement 2022

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Following on from the Emergency Mini-Budget on 23 September 2022, the National Insurance Contributions (NICs) rise introduced in April 2022 (effective from July 2022) was reversed with effect from 6 November 2022.

This means there are three different NIC rates this year.

Our separate article explains the change - NIC rise will be reversed from 6 November 2022.

Although there was subsequently a change of Chancellor who reversed a substantial amount of the Emergency Mini-Budget, the NIC reversal from 6 November was not reversed and thus remains in place until April 2023.

HMRC has updated its rates and thresholds guidance, with guidance on how to correct errors where they occur.

The fix problems with running payroll guidance includes the scenario where payroll software was not updated in time for the new rates from 6 November 2022. Where revisions are required, the employer will need to:

recalculate contributions made between 6 November and the date the software is updated
report figures on the next FPS, as you do not need to resubmit individual payments
refund overpayments to relevant employees.

The guidance also covers what to do where a refund cannot be made to an employee who has left the employment.

The rates and thresholds below reflect those in place for the whole of the current tax year 2022/23, with rates beyond this year noted afterwards.

National Insurance Contributions
Tax year 2022 – 2023

Class 1	Employee - Primary	Employer- Secondary*
6/4/22 – 5/7/22	£190-£967pw: 12.00% Over £967pw: 2.00%	Over £175pw: 13.80%
6/7/22 – 5/11/22	£242-£967pw: 13.25% Over £967pw: 3.25%	Over £175pw: 15.05%
6/11/22 – 5/4/23	£242-£967pw: 12.00% Over £967pw: 2.00%	Over £175pw: 13.80%
	Director - Primary	Director – Secondary*
2022/23	£11,908 - £50,270pa: 12.73% Over £50,270pa: 2.73%	Over £9,100pa: 14.53%

*No employer NICs on the first £967pw for employees generally under 21 years, apprentices under 25 years and veterans in first 12 months of civilian employment.

*No employer NICs on the first £481pw for employees at freeports in Great Britain in the first three years of employment starting from 6 April 2022.

Employment Allowance Per business – not available if sole employee is a director, or employer’s NICs for 21/22 £100,000 or more.	£5,000
Class 1A Employer On car and fuel benefits and most other taxable benefits provided to employees/directors (pa)	14.53%
Class 2 Self-employed Flat rate per week Small profits threshold	£3.15 (£163.80pa) £6,725
Class 4 Self-employed On annual profits of	£11,908 to £50,270: 9.73% Over £50,270: 2.73%
Class 3 Voluntary flat rate per week	£15.85 (£824.20pa)

Tax year 2023 – 2024 and beyond

In the Autumn Statement 2022, the following was announced:

The class 1 primary threshold and class 2 lower profits limit will remain aligned with the personal allowance (£12,570) until April 2028.
The upper earnings limit and class 4 upper profits limit will remain aligned to the higher rate threshold at £50,270 through to April 2028.
The lower earnings limit (£6,396) and the small profits threshold (£6,725) will remain unchanged in 2023/24.
For 2023/24, the class 2 rate will be £3.45 a week and the voluntary class 3 rate will be £17.45 a week
The government will fix the level at which employers start to pay Class 1 Secondary NICs for their employees (the Secondary Threshold) at £9,100 from April 2023 until April 2028.

Further information

Further details of the current year NIC rates can be found on the GOV.UK website.

If you would like to discuss how these changes will affect you or your business, don't hesitate to get in touch with your usual advisor, or a member of Bishop Fleming Payroll Services by IRIS.