The government has announced in-year reductions to National Insurance rates and the cancellation of the Health and Social Care Levy as a separate tax.

The key changes are: 

• National Insurance contribution (NIC) rates will be cut by 1.25 percentage points for employees, employers and the self-employed, effectively reversing the uplift introduced in April 2022 for the rest of the tax year. This cut will take effect from 6 November 2022 and it will cover Class 1 (both employee and employer), Class 1A , Class 1B and Class 4 (self-employed) NICs.
• The ring-fenced Health and Social Care Levy of 1.25% due to be introduced from April 2023 will also not go ahead.

The full detail on all of these changes will be published by HMRC on GOV.UK but HMRC has issued advance notice so that appropriate changes can be made ready for November 2022 payroll. If your business uses HMRC Basic PAYE tools this software will be automatically updated to take account of these changes.

NB these changes are subject to Parliamentary approval.