Taxpayers face two National Insurance changes in April – including paying hundreds more

HomeBusiness

Taxpayers face two National Insurance changes in April – including paying hundreds more

Last year, the Chancellor Rishi Sunak confirmed there would be a rise in the rates of National Insurance contributions (NICs) in April 2022. This w

‘April Fools? No laughing matter!’ Britons face £73 per month rise in bills this month
‘Pathetic!’ GMB viewers slam Laura Tobin’s ‘worst April Fools’ after plant gag
'Was it an April Fools' joke?' Germans mock Putin's threat to cut off gas as 'meaningless'


Last year, the Chancellor Rishi Sunak confirmed there would be a rise in the rates of National Insurance contributions (NICs) in April 2022. This was confirmed by Mr Sunak and Prime Minister Boris Johnson last week in light of criticism over the NI hike as a tax on working-age people. Recently, the Institute of Fiscal Studies (IFS) discussed what taxpayers should know before they see their NI contributions raised in April, revealing the average taxpayer could see their bills go up by £252 a year.

This takes into consideration that the average taxpayer is on a salary of around £30,000 a year.

The IFS estimates that someone on £20,000 will see their tax bill go up by £127 following the pending tax hike.

In comparison, those on a salary of £50,000 should prepare for a tax jump of £502, according to the organisation.

On the higher end of the tax band scale, those on salaries of around £80,000 and £100,000 will pay £877 and £1,127 more in National Insurance, respectively.

READ MORE: Clever ways Brits dodging cost-of-living crisis – like cut own hair

This most recent tax increase is being brought in to pay for the Government’s plan to pay for social care in the UK.

According to the Government, the 1.25 percent National Insurance rise will be a temporary measure before the Health and Social Care Levy, a separate tax, is introduced.

Helen Miller, the deputy director of the IFS and head of the organisation’s tax sector, outlined how people will be affected by the National Insurance hike.

Ms Miller said: “Relative to 2021-22 NICs bills, two things will change in April. First, the threshold at which National Insurance contributions start to be paid will increase – this will reduce NICs bills.

DON’T MISS:

 

“Thresholds tend to increase each April to account for inflation. Second, the rates of NICs will increase.”

Furthermore, the tax expert explained how the self-employed will be taxed ahead of April’s changes to National Insurance.

She added: “The self-employed pay less in National Insurance contributions than employees, but will face the same annual increase.

“([This is] because both employee and self-employed NICs rates are due to rise by 1.25 percentage points.

“This data gives us a compelling insight into the fact that lower and average earners will be significantly more squeezed by the National Insurance hike than those at the very top.

“People earning some of the highest salaries in the country, for example, workers on £100,000 a year are set to pay the same percentage of their salary to NI as a person on £20,000 in 2022, despite earning five times as much.

“Those earning the average wage of £30,000 will see as much as nine percent of their salary swallowed by National Insurance.”

Workers and employers can expect to see their National Insurance contributions raised by 1.25 percentage points in April 2022.



COMMENTS

WORDPRESS: 0
DISQUS: 0