{"id":2573,"date":"2022-06-20T11:09:03","date_gmt":"2022-06-20T10:09:03","guid":{"rendered":"https:\/\/kirkwoodwilson.co.uk\/?p=2573"},"modified":"2022-06-20T11:09:03","modified_gmt":"2022-06-20T10:09:03","slug":"national-insurance-ni-changes-kirkwood-wilson","status":"publish","type":"post","link":"https:\/\/kirkwoodwilson.co.uk\/national-insurance-ni-changes-kirkwood-wilson\/","title":{"rendered":"National Insurance (NI) is on the rise \u2013 how will it affect you?"},"content":{"rendered":"\n

With the cost-of-living crisis really beginning to bite, an increase to NI rates may leave a bitter taste in the mouth of both employers and employees. Today, we\u2019ll break down those increases and show you the little bit of light at the end of the tunnel with the increases.<\/p>\n\n\n\n

You may remember that back in November 2021, Rishi Sunak announced that NI rates would be rising across the board by 1.25%. The change would affect both employees and employers, seeing the former rise to 13.25% for basic rate taxpayers and to 3.25% on any earnings over \u00a350,270. Employer\u2019s NI would rise to 15.15%. The tax<\/a> hike is being labelled as a Health and Social Care Levy and is designed to benefit the NHS.<\/p>\n\n\n\n

National Insurance, what you need to know as an employee<\/h2>\n\n\n\n

For an employee earning \u00a325,000, the cost to the employer for 22\/23 will increase by \u00a3198.75. HMRC has tried to alleviate some of this additional increase by increasing the employment allowance from \u00a34,000 to \u00a35,000 for the 22\/23 year. The \u00a31,000 increase to the employment allowance will alleviate some of the pain felt by employers in the face of this increase, although for many businesses it will still ultimately mean they are worse off when coming to payroll.<\/a><\/p>\n\n\n\n

For employees, with an NI increase to 13.25% (again assuming a salary of \u00a325,000 with a standard tax code and no deductions) an employee would be taking home around \u00a3150 per year less than they were in the previous tax year.<\/p>\n\n\n\n

Back in March 2022, at an emergency budget aimed at tackling the huge rise in costs facing consumers, Rishi Sunak further announced that the threshold at which employees would begin paying NI would rise in line with the personal allowance to \u00a312,570. <\/p>\n\n\n\n

As a result in our example above, the employee would actually be earning somewhere in the region of \u00a3205 more than in the last tax year. It\u2019s nothing major, but some help all the same.<\/p>\n\n\n\n

National Insurance impact on shareholders<\/h2>\n\n\n\n

We also shouldn\u2019t forget the impact on shareholders receiving dividends in this new tax year. Dividend rates have historically been:<\/p>\n\n\n\n