How the backtracking on NIC Reduction & Health and Social Care Levy Reversal will affect you?
In a turnabout of fates and as we are sure you are aware the Government revealed on 22 September 2022 that the 1.25% increase to National Insurance Contributions (NICs) which came into force in April will now be reversed from 6 November 2022. Additionally, the Health and Social Care Levy of 1.25% that was to be introduced in April 2023 would also be cancelled.
The Treasury claims that scrapping the rise will reduce tax for over 900,000 businesses by around £9,600 on average next year, with around 20,000 organisations set to be exempt from paying NI entirely due to employment allowance.
The Treasury have also outlined that around 28,000,000 people in the UK will benefit from the cut, retaining an additional £330 in annual income by the 2023-2024 tax year.
How will this impact me as an Employer?
Now the government has declared the change, you should make sure you are ready for this. Currently, the 1.25% increase has to be listed separately on payslips.
These should be removed from 6 November 2022, and employees should be notified that their payslips will look different. If this cannot be done before, it should be done as soon as possible, and benefits applied retrospectively.
How can we help?
Our advice is to have conversations now so that everyone is aware before the change happens.
At HR and You Ltd we have a team of highly experienced HR Consultants who can manage any HR Project in any capacity, we have the relevant skills and knowledge to support you, and we can work on a project basis for any length of time, why not contact us for a confidential no obligation chat. 0333 006 9489 or email us at [email protected]
We look forward to bringing out the absolute best in your people.
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