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National Insurance Rates Rise Reversal

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National Insurance Rates Rise Reversal

On the 22nd September the Chancellor announced that the National Insurance rise is to be reversed from 6th November. He said that the 1.25 percentage point increase in National Insurance will be reversed to save employees up to an extra £330 per year in 2023-24 on top of saving around £135 on average for the remainder of this tax year.  This will also mean a tax saving for businesses, up to £9,600 per year on average due to reducing their tax liabilities. 

Many small and medium businesses (SMEs) will also 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.

National Insurance thresholds increased in July 2022 to lift 2.2 million of the poorest people in the UK out of paying the tax. The Chancellor has committed to retaining the level of these thresholds to support families. Taken together, the higher thresholds and the Levy reversal mean that almost 30 million people will be better off by an average of over £500 in 2023-24.

If we process your payroll then you do not need to do anything for when this comes into effect as we will process all the changes for you.  If you process your own payroll then please contact your payroll software company to see if you need to upgrade your system to ensure this change comes into effect on the relevant date.

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