Payroll Legislation

NI thresholds and new categories

Legislation

NI thresholds and new categories

Due Date

April 2022

Summary

National Insurance thresholds and new categories that come into effect in April 2022.

 ​Weekly​Monthly​Annual​
Lower Earnings Limit (LEL)​£123​£533​£6,396​
Primary Earnings Threshold (PT)​£190​£823​£9,880​
Secondary Earnings Threshold (ST)​£175​£758​£9,100​
FUST​£481​£2,083​£25,000​
Upper Earning Limit (UEL)​£967​£4,189​£50,270​

As part of the government’s work to ‘level up’ and boost economic activity across the UK, they aim to create up to 11 Freeports in locations across the UK. Freeports will have different customs rules to the rest of the country and will be innovative hubs to boost global trade, attract inward investment and increase productivity. In doing so, the government wants Freeports to generate employment opportunities to benefit deprived communities around the UK.

The government has announced that Employer National Insurance Contributions (NICs) will be included in the wider Freeports initiative and a reduction in the rate of employer NIC’s will be applied for all Freeport based businesses (employers located within a prescribed geographic area and only for employees who are working in that area). This change in rate would see all employers based within and employing people working within the Freeport geographic area, apply a zero-secondary rate of employer NICs for such employees’ earnings above the secondary threshold up to and including a new Freeport Upper Secondary Threshold (FUST). Balance of earnings above FUST would be charged at 13.8%. This relief will be available from 6 April 2022.

  • For an employer to be eligible they must have physical premises in the Freeport tax site.
  • The employee must be a new hire after April 2022 and cannot have worked for that employer (or connected to the employer) in the previous 24 months. The employee must spend 60% of their working time in the Freeport tax site. There is no limit on the number of employees an employer can claim for.
  • Eligibility to claim will expire 36 months from the employee’s start date of their employment and employers will self-assess eligibility for the relief using available guidance from HMRC.

An example of using the “F” NI category for Freeport showing the savings for employers each month for 2022-23:

 ​Weekly​Monthly​Annual​
Lower Earnings Limit (LEL)​£123​£533​£6,396​
Primary Earnings Threshold (PT)​£190​£823​£9,880​
Secondary Earnings Threshold (ST)​£175​£758​£9,100​
FUST​£481​£2,083​£25,000​
Upper Earning Limit (UEL)​£967​£4,189​£50,270​

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