Partner Tim Clark, in our Employment Law team, explains the announced reversal of the National Insurance (NI) rise, introduced earlier this year.
The Treasury announced yesterday that the 1.25% NI increase introduced in April will be reversed from 6 November in a move it says will save almost 28 million workers an average of £330 per year.
The majority of employees should receive the NI cut directly via their November payroll, but some may not do so until December or January, depending on their employer’s payroll software and processes.
Analysis indicates that employees will make the following savings:
|
Salary |
Annual saving |
|
£20,000 |
£93 |
|
£30,000 |
£218 |
|
£50,000 |
£468 |
|
£80,000 |
£843 |
|
£100,000 |
£1,093 |
According to The Treasury 920,000 businesses will also save an average of almost £10,000 next year as a result of the changes.
It said: “920,000 businesses will see a cut in National Insurance bills, with 20,000 taken out of paying National Insurance entirely due to the Employment Allowance, which rose in April 2022 from £4,000 to £5,000.
In particular, many small and medium businesses (SMEs) – who employ over 13 million people in the UK – will see a cut to their National Insurance bills. Next year this will be worth £4,200 on average for small businesses and £21,700 for medium sized firms who pay National Insurance. In total 905,000 micro, small and medium businesses will benefit from 2023-24.”
In addition, the Government will cancel the planned Health and Social Care Levy, a separate tax that was set to come into force in April 2023 to replace this year’s National Insurance rise.
For further information or legal advice, please contact law@blandy.co.uk or call 0118 951 6800.
This article is intended for the use of clients and other interested parties. The information contained in it is believed to be correct at the date of publication, but it is necessarily of a brief and general nature and should not be relied upon as a substitute for specific professional advice.
