Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+

Personnel Today

Register
Log in
Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+

Latest NewsEconomics, government & businessPayrollTax

National insurance rise to be reversed

by Ashleigh Webber 22 Sep 2022
by Ashleigh Webber 22 Sep 2022 The Health and Social Care Levy (Repeal) Bill has been introduced in Parliament
Shutterstock
The Health and Social Care Levy (Repeal) Bill has been introduced in Parliament
Shutterstock

The recent 1.25% national insurance rise will be reversed in November and the Health and Social Care Levy will be scrapped, the Treasury has announced.

In April, employers’ and employees’ national insurance contributions (NICs) were increased by 1.25% to help fund the growing health and social care bill.

NICs were set to return to 2021-22 levels in April 2023, when the separate 1.25% Health and Social Care Levy was due to be introduced as a separate line on employees’ payslips.

However, today (22 September), the government said it would reduce NICs to their previous level and scrap the levy via the Health and Social Care Levy (Repeal) Bill, which has been presented to the House of Commons.

The levy was expected to raise around £13 billion a year to fund the NHS and social care. The government will instead maintain this level of funding via general taxation.

Employees will receive a cut to their NICs in their November pay, but some are likely to receive it in December or January depending on the complexity of their employer’s payroll software.

The government announcement also suggests that employees would be eligible for a NICs “refund”, stating that “individuals should contact their employer for refunds as a first port of call in all circumstances, [but there] there may be circumstances where individuals may need to apply to HMRC for a refund. For example, if their employer is no longer trading, or if an individual has moved roles and their previous employer has confirmed they are unable to issue a refund retrospectively themselves”.

Chancellor Kwasi Kwarteng said: “Taxing our way to prosperity has never worked. To raise living standards for all, we need to be unapologetic about growing our economy.

“Cutting tax is crucial to this – and whether businesses reinvest freed-up cash into new machinery, lower prices on shop floors or increased staff wages, the reversal of the Levy will help them grow, whilst also allowing the British public to keep more of what they earn.”

The Treasury claimed around 920,000 businesses would benefit from the tax reduction from November, saving them an estimated £10,000 a year that they can invest “as they choose”.

Some 20,000 organisations will be taken out of paying NI entirely due to the employment allowance, which rose in April 2022 from £4,000 to £5,000.

The tax cut will save nearly 28 million people an average of £330 per year, the Treasury said.

Steve Herbert, wellbeing and benefits director at consultancy Partners&, said it was unclear whether “reversed” meant employees and employers would receive backdated payments for the higher rate levied since April 2022.

“[It] will be difficult to back-age given the way NI deductions are made,” he said in a LinkedIn post. “[It] will save [the] higher rate taxpayer more than basic rate, but [is] a significant cost saving to employers (assuming the reversal is extended to employers).”

Sign up to our weekly round-up of HR news and guidance

Receive the Personnel Today Direct e-newsletter every Wednesday

OptOut
This field is for validation purposes and should be left unchanged.

Seb Maley, CEO at Qdos, an organisation that provides tax insurance for freelance workers, said: “This is a bold statement from the Chancellor and new Prime Minister, who seem to be setting out their stall as a government intent on cutting taxes from the word go. It is a step in the right direction for self-employed workers, millions of whom have been on the receiving end of short-sighted and potentially sector-threatening tax hikes in recent years.”

HR Director opportunities on Personnel Today


Browse more HR director jobs

Ashleigh Webber

Ashleigh is a former editor of OHW+ and former HR and wellbeing editor at Personnel Today. Ashleigh's areas of interest include employee health and wellbeing, equality and inclusion and skills development. She has hosted many webinars for Personnel Today, on topics including employee retention, financial wellbeing and menopause support.

previous post
Pandemic damaged young people’s confidence and mental health
next post
Working remotely: Gemma Dale talks to Oven-Ready HR

You may also like

Pay awards in real terms could fall for...

21 May 2025

Government defends NIC relief in UK-India trade deal

7 May 2025

Locum doctor loses long-running tax case

9 Apr 2025

Half of companies cut back on hiring due...

7 Apr 2025

Trump’s tariffs to hit growth and jobs, warn...

3 Apr 2025

Spring Statement: no relief on employers’ tax hikes

26 Mar 2025

HR and businesses respond to Spring Statement

26 Mar 2025

‘Light relief’ for workers as inflation drops

26 Mar 2025

Pharmacies to work to rule over higher employment...

18 Mar 2025

Boost pensions via salary sacrifice to offset NI...

17 Mar 2025

  • 2025 Employee Communications Report PROMOTED | HR and leadership...Read more
  • The Majority of Employees Have Their Eyes on Their Next Move PROMOTED | A staggering 65%...Read more
  • Prioritising performance management: Strategies for success (webinar) WEBINAR | In today’s fast-paced...Read more
  • Self-Leadership: The Key to Successful Organisations PROMOTED | Eletive is helping businesses...Read more
  • Retaining Female Talent: Four Ways to Reduce Workplace Drop Out PROMOTED | International Women’s Day...Read more

Personnel Today Jobs
 

Search Jobs

PERSONNEL TODAY

About us
Contact us
Browse all HR topics
Email newsletters
Content feeds
Cookies policy
Privacy policy
Terms and conditions

JOBS

Personnel Today Jobs
Post a job
Why advertise with us?

EVENTS & PRODUCTS

The Personnel Today Awards
The RAD Awards
Employee Benefits
Forum for Expatriate Management
OHW+
Whatmedia

ADVERTISING & PR

Advertising opportunities
Features list 2025

  • Facebook
  • Twitter
  • Instagram
  • Linkedin


© 2011 - 2025 DVV Media International Ltd

Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+