National Insurance Threshold Increase
From 6 July 2022 the Class 1 National Insurance Contributions (NICs) Primary Threshold and the Lower Profits Limit for Class 4 NICs will be aligning with the Personal Allowance which is set at £12,570 per annum.
This will benefit around 30 million people with a typical employee saving over £330 per year.
National Insurance Rates Increase
The Government have confirmed that the additional 1.25% Health and Social Care Levy will still be going ahead as planned, however the increases in the thresholds will mean that around 70% of NICs payers will actually pay less NICs. The rates increases will therefore hit the higher earners who will continue to pay NICs despite the threshold changes.
Class 2 NICs for Self-Employed
From April 2022, self-employed individuals with profits between the Small Profits Threshold of £6,725 and the Lower Profit Limit of £9,880(increasing to £12,570 in July) will not pay Class 2 NICs, however will still be able to continue to build National Insurance credits.
For a self-employed individual with profits falling between these two levels, that's a saving of £163.80 a year (based on the 2022/23 rates of £3.15 per week).
Employment Allowance Increase
Around 495,000 businesses will benefit from an Employment Allowance increase of £1,000 from 6 April 2022. This means that businesses who employ staff and would normally pay Employers National Insurance now get an extra £1,000 discounted - a total of £5,000 per tax year moving forwards (prorated if required).
Future Basic Rate Tax Cuts Confirmed
In his Spring Statement, Rishi Sunak confirmed that by the end of the current Government the basic rate of income tax will drop by one percent to 19%. This is planned from April 2024 however is caveated by saying that if there are circumstances outside of the Governments control, this plan may change.
Temporary Fuel Rate Reduction
A 12 month fuel rate reduction of 5p per litre has been introduced as of 6pm on 23 March 2022 however it's unclear if the "at-pump" price will be forced down by 5p, or if companies will profit by the additional 5p and keep pump prices static.