Rise in National Insurance contributions and Dividend Tax

Increases in National Insurance Contributions and Dividend Taxes are being introduced by the government to provide additional resources for the NHS and social care services.

National Insurance:-

The levy will apply to employees and employers who pay Class 1 N.I., from April 2022 the rate will rise by 1.25%

Class 4 N.I. (on profits) for the self employed will also rise by 1.25%

Tax Year	Employee Rate	Employee Rate	Employer Rate	Self Employed Rate	Self Employed Rate
	Main	Higher		Main	Higher
2021/22	12.00%	2.00%	13.80%	9.00%	2.00%
2022/23	13.25%	3.25%	15.05%	10.25%	3.25%

Director Dividends:-

Dividend tax will also rise by 1.25% from April 2022

Tax Year	Basic Rate	Higher Rate	Additional Rate
2021/22	7.50%	32.50%	38.10%
2022/23	8.75%	33.75%	39.35%

You can find out more about the governments plans for health and social care here:-

Build_Back_Better-_Our_Plan_for_Health_and_Social_Care.pdf

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