The chancellor announced the introduction of the above levy in October 2021 to come into effect from April 2022. Reference has been made to a “1.25% increase”. Whilst the NI rate might go from 12% to 13.25%, in percentage terms this is a 1.25/12 = 10.4% increase. There is a slight increase in the bands though where NI is not payable. For higher earners, paying 3.25% as opposed to 2% is a 62.5% increase!
A couple of examples – someone earning £30,000 pa will pay £214.06 more each year – 8.73% increase on 2021/22, and someone earning £60,000 will pay £589.06 more – 11.6% more than in 2021/22.
Be aware that everyone will see considerably increased NI contributions on their payslips from April 2022, and the self-employed or those paying themselves by dividends will also see increased tax bills in due course.
