Originally Posted by
Geoff Parkstone
rA: basic employee NIC rates for a person on PAYE are currently 12%
The rate next year will be 13.25%
The increase expressed as a percentage - (13.25-12)/12 = 10.42%
To muddy the waters still further, the 1.25% add on also applies to employers NI contribution - from 13.8% to 15.05%, ie a 9.06% increase;
The self employed NI goes up from 9 to 10.25%, an 11.40% increase
and finally, I promise - dividend tax goes up by 1.25% from 7.5% to 8.75% (for basic rate tax payers) an increase of 16.67%
the MA way of expressing the difference will again be different for higher rate tax payers with dividend tax to pay, but lets not complicate it still further.
The bottom line is that an additional 1.25% will be collected under EENI, ERNI, self employed NI and dividend tax regardless of what the previous rate was.
This is just for the year 2022-23, because for 2023-24 and onwards there will be a seperate 1.25% social care levy and NI rates supposedly will return to current levels. We shall see.
bet you wish you'd never asked now!
