On 22 September 2022, the government announced a reversal of the 6 April 2022 1.25% increase in National Insurance rates, with effect from 6 November 2022, or as soon as payroll systems can be changed, if later.

As with the change in National Insurance Contribution (NICs) thresholds on 6 July, employers should be able to rely on their payroll software to automatically calculate NICs at the New rates, however, their software must be up to date for this to happen. Software providers have had much less time to prepare for this latest change compared to the July 2022 changes which were announced in March. Employers are therefore reminded to check what version of their software they are using and to ensure they run an update just before their next payroll run.

HMRC has said that they will be directing employees to their employers to correct any overpaid NICs in the first instance. Where an employer has not been able to process the cut in time and the employee leaves that employment, there may be circumstances where individuals will need to apply to HMRC for a refund. 

Useful guides on this topic

Mini-Budget 2022: National Insurance Contributions
The Chancellor announced prior to his mini-budget in September 2022 that the rise in National Insurance Contributions (NICs) rate of 1.25% which was introduced on 6 April 2022, will be reversed from 6 November 2022.

RTI: Real-Time Information for PAYE
What is RTI: Real-Time Information (RTI) reporting for PAYE? How does it work?

Directors' NICs and payrolls
Payroll year ends: have the right boxes been ticked for directors' NICs?

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