It has today been announced by the Prime Minister that National Insurance is going to rise by 1.25% which will take effect in April 2022. This is to address the funding crisis in health and social care. This is an increase in both employers and employees NI.
From 2023 the NI increase will appear on employee's payslips as a separate Health & Social Care levy.
You can see below how this will affect National Insurance
Annual Salary | Current yearly payment | Additional yearly payment |
£20,000 | £1,251 | + £130 |
£30,000 | £2,451 | + £255 |
£50,000 | £4,851 | + £505 |
£80,000 | £5,479 | + £880 |
£100,000 | £5,878 | + £1,130 |
It has also been announced that the tax on share dividends will also increase by 1.25% which will also take effect from April 2022. This will affect most directors who pay themselves a small salary and larger dividends. It is still expected that this will still be the best way for directors to pay themselves.