The measures announced in The Growth Plan will reduce NIC rates for employers, employees and the self-employed through an in-year change of NIC rates.

With effect from 6 November 2022

  • The Class 1 employee NIC main and additional rates will reduce by 1.25% to 12% and 2% respectively.
  • Class 1 employer NICs will also be reduced by 1.25% to 13.8%. In the case of NIC rates which apply annually (typically in respect of directors’ earnings) there will be transitional arrangements to reduce the current rates.
  • The main and additional rates for the annual earnings basis will be set at 12.73% and 2.73% respectively.

Class 1A and Class 1B NICs will be set at 14.53% for the 2022-23 tax year.

The main and additional rates of Class 4 NIC which are paid by the self-employed will be set at 9.73% and 2.73% respectively for the 2022-23 tax year.

The Chancellor also confirmed that the 1.25% Health and Social Care Levy will not come into force as a separate tax from 6 April 2023 as had been previously planned.