The government is cancelling the health and social care levy – initially introduced as a 1.25 percentage point rise in National Insurance contributions (NICs) which took effect in April 2022.
This will be delivered in two parts:
- the government will reduce NI rates from 6 November 2022, in effect, removing the temporary 1.25 percentage point increase for the remainder of the 2022/23 tax year
- the 1.25% health and social care levy will not come into force as a separate tax from 6 April 2023 as previously planned.
The increased contributions people have paid from 6 April 2022 – 5 November 2022 will not be refunded.
Refunds of NICs will be allowed for contributions after 6 November 2022, should software developers be unable to implement the changes in time.
This tax cut reduces 920,000 businesses’ tax liabilities by £9,600 on average in 2023/24. This is 60% of the UK’s businesses with employer NICs liabilities. It means 28 million people across the UK will keep an extra £330 a year, on average, in 2023/24.
Alex Nicholl, Payroll Director, BM Connect, comments: “Another unprecedented mid-year change in National Insurance will mean employers have to spend time understanding their November payroll reports and fielding queries from employees. We will be welcoming the opportunity to provide support to our clients in helping them understand the changes.”
For more information and assistance, please get in touch: T. 020 7549 2940 E. info@bmconnect.co.uk
