The Chancellor Rishi Sunak made the following announcements on Income Tax and National Insurance in his Spring Statement on 23 March 2022: 

Income Tax

From April 2024

  • The basic rate of Income Tax will decrease from 20% to 19%.  
  • There will be a three-year transition period for Gift Aid relief. 
    • This will maintain the 20% rate of relief for charities until April 2027. 
  • The 1% reduction will not apply to non-savings and non-dividend income received by Scottish taxpayers as that rate is set by the Scottish Government. 

National Insurance Contributions (NICs)

Employers

From 6 April 2022

  • The maximum Employment Allowance available to employers will increase to £5,000 from £4,000.  

Employees

From 6 July 2022

  • The Primary Threshold (above which employees pay Class 1 NICs) will increase from £9,880 to £12,570. 
    • The Primary Threshold will remain aligned with the personal allowance at £12,570 to 2025-26.
    • From 2026-27, the Primary Threshold will be increased with reference to the Consumer Prices Index. 

Summary of Primary Threshold changes

 

 2021-22 

2022-23

 2023-24 

 

 

 To 5 July 

 From 6 July 

 

Weekly

£184 

£190 

£242 

£242 

Monthly

£797 

£823 

£1,048 

£1,048 

Effective annual threshold

£9,568 

£9,880 

£12,570 

£12,570 

Company directors (annual earnings period) 

£9,568 

£9,880 

£11,908 

 £12,570 

 

Self-employed

From April 2022

  • No Class 2 NICs will be payable where self-employment profits fall between the Small Profits Threshold (£6,725) and the Lower Profits Limit. 
    • NI credits will continue to be received where profits exceed the Small Profits Threshold. 

From 6 July 2022

  • The Lower Profits Limit (above which the self-employed pay Class 4 NICs) will increase from £9,880 to £12,570 annually. 
    • The Lower Profits Limit will remain aligned with the personal allowance at £12,570 to 2025-26.
    • From 2026-27, the Lower Profits Limit will be increased with reference to the Consumer Prices Index. 

Summary of self-employed changes:

 

2021-22

2022-23

2023-24

Class 4 Lower Profits Limit (annual)

 £9,568 

 £11,908* 

 £12,570 

Class 2 NICs (weekly) where profits: 

  • Exceed the Small Profits Threshold
  • Do not exceed the Lower Profits Limit 

£3.05 

£nil 

£nil 


*Equivalent to 13 weeks at £9,880 and 39 weeks at £12,570.

Useful guides on this topic

Spring Statement 2022: Tax Summary
At a glance guide to new measures announced during the Spring Statement 

External links

Spring Statement 2022: Personal Tax Factsheet

Policy Paper: National Insurance: Increase to Primary Threshold and the Lower Profits Limit and reduction in Class 2 liability of those earning between the Small Profits Threshold and Lower Profits Limit

Draft legislation: National Insurance Contributions (Increase of Thresholds) Bill 

Policy Paper: Employment Allowance increases to £5,000 from April 2022


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