National Insurance contribution uplift
From 6 April 2022 to 5 April 2023 National Insurance contributions (NICs) will increase by 1.25% for working age employees, employers and the self-employed. This increase is to help fund the NHS and health and social care in the UK.
From April 2023, this will become a Health and Social Care Levy and NICs will go back down to 2021-22 levels. The Levy will apply to the same individuals and income as Class 1 (Employee, Employer) and Class 4 (Self-Employed, including partners) National Insurance, and to the main and higher rates; it will also apply to those above State Pension age who are still in employment.
To provide clarity on the purpose of the 1.25% uplift, HMRC are asking employers to include the following wording on employee’s payslips between 6 April 2022 and 5 April 2023:
“1.25% uplift in NIC’s to fund NHS, Health and Social Care.”
It is not mandatory to include the new commentary on payslips, however it is ‘strongly encouraged’ by HMRC.
It is anticipated that payroll software providers will include the requested wording within their software, however some employers may need to add the additional wording manually.
National Minimum Wage increases in April
The National Minimum Wage and National Living Wage increase on 1 April.
The National Living Wage (statutory wage for workers aged 23 and over) rises to £9.50 from April, an increase of £0.59 on the current rate.
The new levels will be as follows:
- 23 years and over: £9.50
- 21 to 22 years: £9.18
- 18 to 20 years: £6.83
- Under 18 years: £4.81
- Apprentice: £4.81
Employers should ensure they are ready to make the necessary changes to their payroll arrangements.
Claiming National Insurance contributions relief for veterans
From 6 April 2022 onwards, a zero rate of employers Class 1 National Insurance contributions can be applied on the earnings of a qualifying veteran.
An employee qualifies as a veteran if they have either served at least one day in the regular armed forces or completed at least one day of basic training. The relief applies to the part of the employee’s earnings below the Veterans upper secondary threshold.
There is a qualifying period of 12 months, starting on the first day of the veteran’s first civilian employment since leaving the regular armed forces.
How to claim the relief
A revised Final Payment Submission (FPS) should be submitted, using National Insurance category letter V for qualifying veteran employees.
Records showing the employee’s eligibility for the relief should be kept for at least 4 years.
Changes to Construction Industry Scheme (CIS) Deductions
From April 2022, construction businesses that are not operated through a limited company should not claim back a CIS deduction on the Employer Payment Summary (EPS).
When limited companies are claiming CIS deductions on the EPS, they must enter their Corporation Tax Unique Taxpayer Reference (CT UTR).
If a company is unable to find their CT UTR, a request can be made online. The CT UTR will then be sent to the business address registered with Companies House.