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How will the National Insurance increase affect your business?

How will the National Insurance increase affect your business?

April Foster


This is a reminder that from April 2022, National Insurance contributions are set to rise through the introduction of a 1.25% Health and Social Care Tax Levy. Dividends rates are also set to increase by the same amount.

If your business pays Class 1, Class 1A or Class 1B National Insurance contributions, you’ll need to start paying the 1.25 % increase in contributions from 6 April 2022.   From 6 April 2023 the National Insurance contributions will go back down to 2021-22 rates, and the levy will become a separate new tax of 1.25%. 

When you will not have to pay the extra 1.25%
If your employee falls into one of the following categories and earns less than £50,270 (or £25,000 for Freeport employees) per year, existing reliefs will apply for: 

  • apprentices under the age of 25
  • employees under the age of 21
  • armed forces veterans
  • employees in Freeports

Existing employer reliefs and allowances that apply to National Insurance contributions will still apply. 


HMRC is asking employers, where appropriate, to include the following message on payslips: 

1.25% uplift in NICs, funds NHS, health and social care

For further information on the National Insurance increase, visit If you need further advice, please contact your usual Moore adviser.


For a full roundup of other key payroll changes, including the National Minimum Wage increasing from £8.91 per hour to £9.50 per hour, download our handy guide.