HMRC has confirmed the 2022/23 NIC rates in an email to software developers. The lower NIC thresholds and limits will rise by 3.1%, in line with CPI inflation to September 2021 (although inflation reached 5.4% in December 2021). NATIONAL INSURANCE CONTRIBUTIONS (NICs) Class 1 NICs: Employee and employer rates and thresholds (£ per week) Tax year 2019-20 Tax year 2020-21 Weekly Lower Earnings Limit (LEL) £118 £120 Weekly Primary Threshold (PT) £166 £183 Weekly Secondary Threshold (ST) £166 £169 Upper Earnings Limit (UEL) £962 £962 National Insurance contributions Income taxes Share This observation summarises some of the key facts about how National Insurance contributions (NICs) work and who will be paying more in NICs from April 6th 2022. 1. Who pays NICs? The Health and Social Care Levy Act 2021 introduced a temporary 1.25 percentage point increase to Class 1, Class 1A, and Class 1B NIC rates for 2022/23. This was a transitional measure before the separate Health and Social Care Levy was to take effect next year. During 2022/23 the rates of NICs for both employees and employers, as well as the primary threshold for employees, were changed: In the Spring Statement 2022 the then Chancellor Rishi Sunak announced that the primary threshold, set at £190 from 6 April 2022, would be increased to £242 from 6 July 2022. For 2022/23 the point at which the self-employed person starts to pay Class 2 NICs will increase to £11,908. This means those with profits between the Small Profits Threshold and the Lower Profits Limit will not pay Class 2 NICs, but will still be able to access entitlement to contributory benefits. The rates of primary class 1 NIC paid by employees are increasing on 6 April 2022 from 12% to 13.25% and from 2% to 3.25% for the upper rate. The lower earnings limit (LEL) has not been changed from the proposed level for 2022/23, which will be: £123 per week, £533 per month, £6,396 per year. BUK3SK.

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