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Samantha O’Sullivan MCIPPdip, policy lead at the CIPP , guides payroll professionals on the mid-year change to National Insurance (NI) from 6 July 2022
I f July wasn’t already a busy period in the payroll professionals’ calendar, the Chancellor of the Exchequer, Rishi Sunak, gave us some extra work to do for the 2022/23 tax year, with announcements delivered in the spring statement 2022. An increase to both the primary threshold (PT) and lower profits limit was confirmed, meaning they will change from £9,880 to £12,570, from 6 July 2022. This change will align the rates with the income tax personal allowance. This means that, from 6 April 2022 to 5 July 2022, the PT will be set at £190 per week (£823 per month), but from 6 July 2022, this will rise to £242 per week (£1,048 per month).
from July 2022, approximately 70% of workers will pay less National Insurance (NI) than they did in 2021/22, even after accounting for the introduction of the new health and social care levy. Additionally, roughly 2.2 million individuals won’t pay class 1 employee NI, class 4 self- employed NI or the health and social care levy once the threshold is increased. The 2022/23 tax year has seen many new elements that would have required thorough testing
was to give software developers and employers sufficient time to update their systems and to implement changes. Testing As seasoned payroll professionals, we’re used to testing software at the beginning of a new tax year to ensure parameters and thresholds in our chosen payroll software are working correctly. However, most of us wouldn’t expect to be testing changing thresholds part-way through the tax year. In fact, many commentators have stated they can’t remember a time when a change to NI thresholds was introduced within the same timeframes. The 2022/23 tax year has seen many new elements that would have required thorough testing, including, but not restricted to: ● five new NI categories (F, I, S, L, V)
Primary threshold Government publications state that,
The rationale behind implementing the change part-way through the tax year
PT to 5 July 2022
PT from 6 July 2022
Weekly
£190
£242
2-weekly
£380
£484
4-weekly
£760
£967
Monthly
£823
£1,048
Quarterly
£2,470
£3,143
Half-yearly
£4,940
£6,285
Annual
£9,880
£12,570
Directors’ annual
£11,908
| Professional in Payroll, Pensions and Reward | July - August 2022 | Issue 82 50
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