Page 7 - Spring Statement - March 2022

National insurance contributions

The Class 1 national insurance contribution (NIC) employer secondary threshold for 2022/23 will rise by 3.3% to
£9,100 a year. The Class 1 upper earnings limit (for employees) and Class 4 upper profits limit (for the self-employed)
is frozen at £50,270, in line with the frozen UK higher rate income tax threshold.

Class 2 NICs, once set for abolition, will rise to £3.15 a week for 2022/23.

A 1.25 percentage point increase will apply to rates for all contribution under Class 1 and Class 4 for 2022/23, before
being replaced by the new, separate 1.25% Health and Social Security Levy from 2023/24. Both employees and self-
employed workers above state pension age (66 at present) will be subject to the new levy from 2023/24, but will
otherwise remain exempt from NICs.

Company cars

For 2022/23, company car tax will see some rationalisation. For all but the highest emission vehicles already subject to
a 37% scale charge, cars registered since 6 April 2020 will be subject to a 1ppt increase in the scale charge. The scale
charge on older vehicles will not alter, with the result that from 6 April 2022 a single CO2 emissions-based scale
charge table will cover all cars, whether their emissions are measured under the NEDC or its successor WLTP rules.

The 4% diesel surcharge will remain for diesel cars not meeting the RDE2 emission standard (which became a
statutory requirement at the start of 2021).

For electric vehicles (EVs) with zero emissions, the scale charge will increase from 1% to 2%.
Inheritance tax

The main nil rate band and residence nil rate band are frozen at £325,000 and £175,000 until 2026/27.

Capital gains tax

The capital gains tax annual exemption of £12,300 will also be frozen until 2026/27.

Pensions lifetime and annual allowances

The lifetime allowance will remain at £1,073,100 until 2026/27 while the annual allowance stays at a maximum of
£40,000, subject to the taper and money purchase annual allowance rules.

Automatic pension enrolment

Contribution thresholds and rates for workplace pensions operating under the automatic enrolment provisions for
2022/23 will all be unchanged:

2021/22 and 2022/23
Earnings trigger for auto-enrolment £10,000
Employer minimum contribution 3% of band earnings
£6,240 – £50,270
Employee contribution before tax relief* 5% of band earnings
£6,240 – £50,270
Maximum potential total contribution £3,522
* If employer pays minimum required of 3%

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