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National Insurance and Dividend Tax Increase – April 2022

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The government has announced that starting in April 2022, National Insurance contributions are to rise by 1.25% to fund social care costs.

National Insurance Contributions will increase by 1.25% from April 2022 for employees, employers & self employed. Those above state pension age will not be affected.

From April 2023, this extra 1.25% will be re-named as ‘Health & Social Care Levy’ and will remain as 1.25%. This will now be deducted from those above state pension who are employed or self employed with earnings above £9,568.

These changes will be administered through payroll for employees and through personal tax returns for the self employed.

The tax rate for dividends will also increase by 1.25% from April 2022.
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How The Health and Social Care Levy Applies From 2022

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[av_table purpose=’tabular’ pricing_table_design=’avia_pricing_minimal’ pricing_hidden_cells=” caption=” responsive_styling=’avia_responsive_table’ id=” custom_class=” av_uid=’av-2ttkjxj’]
[av_row row_style=’avia-heading-row’ av_uid=’av-1uj316y’][av_cell col_style=’avia-highlight-col’ av_uid=’av-1sp0ch6′][/av_cell][av_cell col_style=” av_uid=’av-6e0n9m’]Employees Class 1 NICs

Main Rate / Higher Rate
[/av_cell][av_cell col_style=” av_uid=’av-1qghomi’]Employer Class 1 NICs

[/av_cell][av_cell col_style=” av_uid=’av-1oholne’]Self-Employed Class 4 NICs

Main Rate / Higher Rate
[/av_cell][/av_row]
[av_row row_style=” av_uid=’av-1mttgru’][av_cell col_style=’avia-highlight-col’ av_uid=’av-1l8quq2′]NICs rates for 21/22

[/av_cell][av_cell col_style=” av_uid=’av-1ja94p6′]12% / 2%

[/av_cell][av_cell col_style=” av_uid=’av-1ie32vu’]13.8%

[/av_cell][av_cell col_style=” av_uid=’av-1g9to0a’]9% / 2%

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[av_row row_style=” av_uid=’av-1e48gga’][av_cell col_style=’avia-highlight-col’ av_uid=’av-1cenlcq’]NIC rates for 22/23

[/av_cell][av_cell col_style=” av_uid=’av-1b5b7x6′]13.25% / 3.25%

[/av_cell][av_cell col_style=” av_uid=’av-19xdn6y’]15.05%

[/av_cell][av_cell col_style=” av_uid=’av-18dgtru’]10.25% / 3.25%

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[av_row row_style=” av_uid=’av-161mcne’][av_cell col_style=’avia-highlight-col’ av_uid=’av-42kbei’]NIC rates from 23/24

Health and Social Care Levy from 23/24[/av_cell][av_cell col_style=” av_uid=’av-12k817u’]12% / 2%

1.25%
[/av_cell][av_cell col_style=” av_uid=’av-115o48q’]13.8%

1.25%[/av_cell][av_cell col_style=” av_uid=’av-zfv3xm’]9% / 2%

1.25%
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[av_row row_style=” av_uid=’av-xdxxgq’][av_cell col_style=’avia-highlight-col’ av_uid=’av-wfjaey’]Threshold at which NICs become payable in 21/22

[/av_cell][av_cell col_style=” av_uid=’av-uf74ey’]£9,568

[/av_cell][av_cell col_style=” av_uid=’av-sbssd6′]£8,840

[/av_cell][av_cell col_style=” av_uid=’av-rdr0a2′]£9,568

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Dividend Tax Rates and Changes From 2022

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[av_row row_style=’avia-heading-row’ av_uid=’av-pi6iu2′][av_cell col_style=’avia-highlight-col’ av_uid=’av-ooscp6′][/av_cell][av_cell col_style=” av_uid=’av-mrukka’]Basic rate taxpayers[/av_cell][av_cell col_style=” av_uid=’av-klxcwq’]Higher rate taxpayers[/av_cell][av_cell col_style=” av_uid=’av-jty76y’]Additional rate taxpayers[/av_cell][/av_row]
[av_row row_style=” av_uid=’av-gzucy2′][av_cell col_style=’avia-highlight-col’ av_uid=’av-1n8vtm’]Dividend tax rates for 21/22[/av_cell][av_cell col_style=” av_uid=’av-dpx8ve’]7.5%[/av_cell][av_cell col_style=” av_uid=’av-cew7sq’]32.5%[/av_cell][av_cell col_style=” av_uid=’av-azmkwa’]38.1%[/av_cell][/av_row]
[av_row row_style=” av_uid=’av-9cqt62′][av_cell col_style=’avia-highlight-col’ av_uid=’av-84xb1m’]Dividend tax rates from 22/23[/av_cell][av_cell col_style=” av_uid=’av-60se7e’]8.75%[/av_cell][av_cell col_style=” av_uid=’av-4607a2′]33.75%[/av_cell][av_cell col_style=” av_uid=’av-2j1fiy’]39.35%[/av_cell][/av_row]
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