The Chancellor Rishi Sunak made his Spring Statement speech on Wednesday 23rd March 2022.
He set out the Government’s tax plan to support the UK with cost-of-living increases.
Key points to note:
- The National Insurance Primary Threshold for Class 1 NIC has increased from 6th July 2022,meaning it will align with the income tax personal allowance which is set to £12,570.00.
This means that as an employee you will not pay PAYE or NIC on any earnings below £12,570. As this will impact employees all over the country the employer’s threshold (secondary threshold) will not change and therefore the employers NIC will still be applicable on earnings over £9,100.00.
If you are not sure how this will impact, you then give us a call and we could talk through the changes to your take home pay from July 2022.
- Employment Allowance is increasing from £4,000 to £5,000 from 6th April 2022.
Employment Allowance is an amount of money that HMRC give to eligible companies off their employers NIC bill. If the employers NIC for one month is £500 then the company will not need to pay this over to HMRC and they have the rest of their allowance left to use against future months.
If you are not sure if you are eligible for employment allowance, then you can give us a call to discuss your personal circumstances but someone the key eligibility is below:
- Employers Class 1 NIC were less than £100,000 in the previous tax year.
- If you are part of a group, then your total employers NIC must have been less than £100,000 in the previous year. (You can only claim this allowance on one company in the group)
- You are a company with only one employee paid above the Class 1 NIC secondary threshold and that employee is also a director.
- Someone whose earnings are within the IR35 rules.
- Someone you employ for personal, household, or domestic work, unless they are a care or support worker.