In the Autumn Budget 2021, several changes were announced which would impact on businesses that have employees. We have written this article summarising some of the main changes that you need to be aware of if you are an employer.

1. National Insurance Contributions (NICs)

In September 2021 the government published its proposals for new investment in health and social care in England. The Health and Social Care Levy Act provides for a temporary 1.25% increase to both the main and additional rates of Class 1, Class 1A, Class 1B and Class 4 NICs for 2022/23.

From April 2023 onwards, the NIC rates will decrease back to 2021/22 levels and will be replaced by a new 1.25% Health and Social Care Levy.

Broadly, the new Health and Social Care Levy will be subject to the same reliefs, thresholds, and requirements as NIC. However, the Levy (as opposed to the temporary increase in NICs for 2022/23) will also apply to those above State Pension age who are still in employment.

Existing reliefs for NICs to support employers will apply to the Levy. Companies employing apprentices under the age of 25, all people under the age of 21, veterans and employers in Freeports will not pay the Levy for these employees if their yearly gross earnings are less than £50,270, or £25,000 for new Freeport employees.

The Employment Allowance, which reduces employers’ Class 1 NICs by up to £4,000, will also be available for the employers’ liability to the Levy.

2. National Living Wage (NLW) and National Minimum Wage (NMW)

Following the recommendations of the independent Low Pay Commission, the government will increase the NLW for individuals aged 23 and over by 6.6% from 1 April 2022. The government has also accepted the recommendations for the other NMW rates to be increased.

From 1 April 2022, the hourly rates of NLW and NMW will be:

• £9.50 for those 23 years old and over
• £9.18 for 21-22 year olds
• £6.83 for 18-20 year olds
• £4.81 for 16-17 year olds
• £4.81 apprentice rate for apprentices under 19, and those 19 and over in their first year of apprenticeship.

If you are an employer then you need to make sure that the changes to National Insurance Contributions, National Living Wage and National Minimum Wage are made at the right time. If you need any further advice about your responsibilities as an employer or would like support with financial forecasting taking these changes into account, then please do contact us by calling 01623 490 120 or email This email address is being protected from spambots. You need JavaScript enabled to view it.