National Insurance Primary Threshold and the Lower Profits Limit increase and associated Class 2 changes in 2022 to 2023 tax year
This tax information and impact note is about the increase in the Primary Threshold and Lower Profit Limit and associated Class 2 changes.
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This measure will increase the Primary Threshold (PT) for Class 1 National Insurance contributions (NICs) and Lower Profits Limit (LPL) for Class 4 NICs from 6 July 2022, aligning them with the personal allowance for income tax which is set at 拢12,570 per annum. These thresholds will remain aligned.
From April 2022, this measure also reduces Class 2 NICs liabilities to nil on profits between the Small Profits Threshold (SPT) and LPL. This will ensure that no one earning between the SPT and LPL will pay any Class 2 NICs, while allowing individuals to be able to continue to build up National Insurance credits.