UK Government announces National Insurance changes

National Insurance increase reversed from 6 November 2022

The government has recently announced that the 1.25 percentage point increase to National Insurance (NI) introduced in July 2022 will be reversed from 6 November 2022.

In addition to the reversal of this year’s increase to NI, next year’s health and social care levy will be repealed. This separate levy, planned to come into force in April 2023, would have replaced this year’s temporary NI rise.

The Health and Social Care Levy (Repeal) Bill confirms that the changes will take place from 6 November 2022, so any payments made in relation of earnings prior to that date will remain at the increased rate and no refund need be made.

The original increase also affected dividend tax rates. A further statement made by the Chancellor, Jeremy Hunt on 17th October 2022 confirmed that the increased rate of dividend tax would not be reversed.