Urgent Comment on National Insurance Reversal
Nimesh Shah CEO at leading tax and advisory form Blick Rothenberg says:
“The new Chancellor, Kwasi Kwarteng, has made a bold, unexpected and positive move to reverse the 1.25% National Insurance increase at the first opportunity from 6 November 2022.
Liz Truss’ new Government has kept to its word to reverse the National Insurance ‘from day one’ and people will see the impact in their November pay packets.
Whilst the Government should be lauded for the swift and positive move to put money back into people’s pockets at a time when it is most needed, this is a third change to National Insurance this tax year – this is unprecedented and I cannot recall a time when the same tax was altered three times in the same tax year.
The further change also raises questions around whether firstly HMRC can implement the change to their systems in time for November; but more importantly, whether the PAYE system will be able to handle the ‘yo-yo’ effect of the different National Insurance regimes in play this tax year. People will need to review their payslips carefully to ensure the right amount of National Insurance is deducted from their salaries.
This is all takes place before Kwarteng has delivered his mini-Budget, and ahead of a fuller Autumn Budget later this year when more announcements on income tax are expected.”
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