NIM01610 - Class 1 structural overview from 6 April 2009: 2022 to 2023 tax year only: rates of Class 1, and sporting testimonials and termination payments
Health and Social Care Levy Act 2021 (HSCL Act 2021)
Health and Social Care Levy (Repeal) Act 2022 (HSCL (Repeal) Act 2022)
The Social Security (Contributions) (Amendment No. 2) Regulations 2022 (SI 2022 No 416)
The HSCL Act 2021 and the HSCL (Repeal) Act 2022 provide for two changes to NICs rates during the 2022 to 2023 tax year which affects how Class 1 NICs is calculated. The rate of Class 1 NICs which applies depends, as always, on the date on which the payment of earnings is made. This is except if the employee is a director – see NIM01615.
6 April 2022 to 5 November 2022
From 6 April 2022, the HSCL Act 2021 and the Social Security (Contributions) (Amendment No. 2) Regulations 2022 increased the rate of NICs as follows.
- Main primary percentage – 13.25%
- Additional primary percentage – 3.25%
- Married women and widows reduced rate – 7.1%
- Secondary percentage – 15.05%
6 November 2022 to 5 April 2023
From 6 November 2022, the HSCL (Repeal) Act 2022 reduced the rate of NICs as follows.
- Main primary percentage – 12%
- Additional primary percentage – 2%
- Married women and widows reduced rate – 5.85%
- Secondary percentage – 13.8%
Sporting testimonials and termination payments
The secondary percentage rate also applies to Class 1A except sporting testimonials and termination payments which are reported in real time (“RTI Class 1A”).
In the 2022 to 2023 tax year the rate of Class 1A NICs that applies for RTI Class 1A depends entirely on when the payment is made in the same manner as Class 1 NICs. Where the payment is made:
- on or before 5 November 2022 then the rate of Class 1A is 15.05%,
- on or after 6 November then the rate of Class 1A is 13.8%.
This applies even if the employee is a director. Employers of directors do not apply the blended rate of Class 1A to sporting testimonials and termination payments which are reported in real time.