Earlier this year, the government increased National Insurance Contributions (NICs) from 12% to 13.25%. The move was the first element in the introduction of the Health and Social Care Levy as a separate tax. From April 2023, the plan was for the rate of NICs to fall back to 12%, but for the 1.25% to remain as a standalone levy.
If you’re employed and not a director (because directors pay NI differently), you’ll have seen the difference in your monthly pay. You’ll also have seen a rider attached to your payslip explaining the reason for the change in NICs.
The former Chancellor’s mini budget, however, scrapped all that. Because the legislation was already making its way through Parliament, the current Chancellor chose not to undo it.
Employers and payroll providers should, therefore, revert NICs to12% and remove the payslip rider with immediate effect.
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