Policy paper

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.

• From: HM Revenue & Customs
• Published: 23 March 2022

Documents

National Insurance: Increase to Primary Threshold and the Lower Profits Limit and reduction in Class 2 liability of those earning between the Small Profits Threshold and Lower Profits Limit

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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 £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.

Published 23 March 2022