Readers are reminded of the changes to National Insurance contributions (“NICs”) and dividend tax rates announced in September which will take effect from April 2022. Also announced in September, the Government has legislated for a new 1.25 percent Health and Social Care Levy which will apply UK-wide from April 2023 to the same population and income as Class 1 (Employee, Employer) and Class 4 (Self-Employed) NICs, and to the main and additional rates.
NICs rates and thresholds
The Government will use the September CPI figure of 3.1 percent as the basis for uprating NICs limits and thresholds, and the rates of Class 2 and 3 NICs, for 2022/23. This excludes the Upper Earnings Limit and Upper Profits Limit which will be maintained at current levels in line with the higher rate threshold for income tax.
Household Support Fund payments
Legislation will be introduced via Statutory Instrument in Spring 2022 to clarify that payments through the Household Support Fund, and equivalent schemes in the devolved administrations, are not subject to income tax.
Regulation making powers for national emergencies
The Budget also announced that the Government will introduce regulation-making powers that would allow ministers to take decisions to provide income tax and NICs reliefs on specific expenses or benefits-in-kind in the event of a disaster or emergency of national significance.
Pensions tax relief top-up for low earners in net pay arrangements
In 2025/26 the Government will introduce a system to make top-up payments in respect of contributions made in 2024/25 onwards directly to low-earning individuals saving in a pension scheme using a Net Pay Arrangement. A response to the Call for Evidence on pensions tax relief administration providing further details was also published.
And finally there is no change to the £5,000 zero percent starting rate for savings nor to the ISA or Child Trust Fund annual subscription limits.
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