2022 No. 232

Social Security

The Social Security (Contributions) (Rates, Limits and Thresholds Amendments and National Insurance Funds Payments) Regulations 2022

Made

Coming into force

These Regulations are made by the Treasury, in exercise of the powers conferred by sections 5(1) and (4) to (6), 9A(7) and (8), 9B(4) and (5) and 175(3) of the Social Security Contributions and Benefits Act 19921 (“the Contributions Act”), sections 5(1) and (4) to (6), 9A(7) and (8), 9B(4) and (5) and 171(3) and (10) of the Social Security Contributions and Benefits (Northern Ireland) Act 19922 (“the Northern Ireland Contributions Act”), sections 141(4) and (5) and 142(2) and (3) of the Social Security Administration Act 19923 (“the Administration Act”), section 129 of the Social Security Administration (Northern Ireland) Act 19924 (“the Northern Ireland Administration Act”), section 2(2) and (3) of the Social Security Act 19935 (“the 1993 Act”) and article 4(3) and (4) of the Social Security (Northern Ireland) Order 19936 (“the 1993 Order”).

Regulations 3 to 5 are made as a result of the Treasury carrying out in the tax year 2021-22 a review of the general level of earnings in Great Britain in accordance with section 141(1) and (2) of the Administration Act7.

The Treasury have determined that, in relation to Great Britain, regulations 3 to 5 should be made under section 141 of the Administration Act to amend Part 1 of the Contributions Act by altering the rate of, and small profits threshold for, Class 2 contributions, the amount of a Class 3 contribution and the lower limit of profits to be taken into account for Class 4 contributions.

Regulations 3 to 5 make provision for Northern Ireland which corresponds to that mentioned in relation to Great Britain in the preceding recital, in accordance with section 129 of the Northern Ireland Administration Act.

With a view to adjusting the level at which the National Insurance Fund stands for the time being and having regard to estimated benefit expenditure for the financial year ending with 31st March 2023, the Treasury think it expedient that regulation 7 should be made under section 2(2) of the 1993 Act.

With a view to adjusting the level at which the Northern Ireland National Insurance Fund stands for the time being and having regard to estimated benefit expenditure for the financial year ending with 31st March 2023, the Treasury think it expedient that regulation 8 should be made under article 4(3) of the 1993 Order.

A draft of these Regulations was laid before Parliament in accordance with the provisions of section 176(1)(za), (zb) and (a) of the Contributions Act8, section 172(11ZA), (11ZB) and (11A) of the Northern Ireland Contributions Act9, sections 141(3) and 190(1)(a) of the Administration Act10, section 166(10A) of the Northern Ireland Administration Act11, section 2(8) of the 1993 Act and article 4(8) of the 1993 Order12 and approved by a resolution of each House of Parliament.

PART 1General

Citation and commencement1

These Regulations may be cited as the Social Security (Contributions) (Rates, Limits and Thresholds Amendments and National Insurance Funds Payments) Regulations 2022 and come into force on 6th April 2022.

PART 2Rates, limits and thresholds for National Insurance contributions

Interpretation2

In this Part—

  • “the Act” means the Social Security Contributions and Benefits Act 1992; and

  • “the Northern Ireland Act” means the Social Security Contributions and Benefits (Northern Ireland) Act 1992.

Rate of and small profits threshold for Class 2 contributions3

In section 11 of the Act13 and the Northern Ireland Act14 (Class 2 contributions)—

a

in subsections (2) and (6) for “£3.05” substitute “£3.15”; and

b

in subsection (4) (small profits threshold) for “£6,515” substitute “£6,725”.

Amount of a Class 3 contribution4

In section 13(1) of the Act15 and the Northern Ireland Act16 (Class 3 contributions) for “£15.40” substitute “£15.85”.

Lower limit of profits for Class 4 contributions5

In sections 15(3)(a) and 18(1)(c) and (1A)(a) of the Act17 and the Northern Ireland Act18 (Class 4 contributions recoverable under the Income Tax Acts and under regulations) for “£9,568” substitute “£9,880”.

Amendments to the Social Security (Contributions) Regulations 20016

1

The Social Security (Contributions) Regulations 200119 are amended as follows.

2

In regulation 10 (earnings limits and thresholds)—

a

in the introductory words, for “2021” substitute “2022”;

b

in paragraph (a) (lower earnings limit: primary Class 1 contributions) for “£120” substitute “£123”;

c

in paragraph (c) (primary threshold: primary Class 1 contributions) for “£184” substitute “£190”; and

d

in paragraph (d) (secondary threshold: secondary Class 1 contributions) for “£170” substitute “£175”.

3

In regulation 11 (prescribed equivalents)—

a

in paragraph (3) (primary threshold)—

i

in sub-paragraph (a) for “£797” substitute “£823”; and

ii

in sub-paragraph (b) for “£9,568” substitute “£9,880”;

b

in paragraph (3A) (secondary threshold)—

i

in sub-paragraph (a) for “£737” substitute “£758”; and

ii

in sub-paragraph (b) for “£8,840” substitute “£9,100”.

PART 3National Insurance Funds

Prescribed percentage of estimated benefit expenditure – Great Britain7

Section 2(2) of the Social Security Act 1993 (payments into National Insurance Fund out of money provided by Parliament) has effect with respect to the tax year 2022-23 and the prescribed percentage of estimated benefit expenditure for the financial year ending with 31stMarch in that tax year shall be 17 per cent.

Prescribed percentage of estimated benefit expenditure – Northern Ireland8

Article 4(3) of the Social Security (Northern Ireland) Order 1993 (payments into Northern Ireland National Insurance Fund out of appropriated money) has effect with respect to the tax year 2022-23 and the prescribed percentage of estimated benefit expenditure for the financial year ending with 31st March in that tax year shall be 17 per cent.

Michael TomlinsonRebecca HarrisTwo of the Lords Commissioners of Her Majesty’s Treasury
EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations amend the Social Security Contributions and Benefits Act 1992 (c. 4) and corresponding provisions in the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (c. 7) (“the Acts”) and the Social Security (Contributions) Regulations 2001 (S.I. 2001/1004) (“the Contributions Regulations”). The amendments have effect from 6th April 2022.

Regulation 3 increases the rate at which Class 2 National Insurance contributions (“NICs”) are payable by self-employed earners, specified in section 11(2) and (6) of the Acts, from £3.05 to £3.15 per week. It also increases the small profits threshold specified in section 11(4) of the Acts, which is the minimum amount of profits chargeable to income tax that a self-employed earner must generate to incur liability to Class 2 NICs, from £6,515 to £6,725 per year.

Regulation 4 increases the amount of voluntary Class 3 NICs, specified in section 13(1) of the Acts, from £15.40 to £15.85.

Regulation 5 increases the lower profits limit for Class 4 NICs specified in sections 15 and 18 of the Acts, above which Class 4 NICs are payable by the self-employed at the main Class 4 percentage rate, from £9,568 to £9,880 per year. The upper limit remains at £50,270.

Regulation 6(2) increases or maintains at the same level (as the case may be) a number of weekly earnings limits and thresholds specified in regulation 10 of the Contributions Regulations which are used for determining liability to Class 1 NICs and entitlement to associated state benefits: (i) the lower earnings limit, on or above which an earner gains access to certain state benefits, increases from £120 to £123; (ii) the upper earnings limit, above which primary Class 1 NICs are payable at the additional primary percentage, remains at £967; (iii) the primary threshold, above which primary Class 1 NICs are payable at the main primary percentage, increases from £184 to £190; (iv) the secondary threshold, above which secondary Class 1 NICs are payable, increases from £170 to £175; (v) the upper secondary threshold for the Under 21 age group, below which secondary Class 1 NICs are payable at a zero-rate, remains at £967; and (vi) the upper secondary threshold for relevant apprentices, below which secondary Class 1 NICs are payable at a zero-rate, remains at £967.

Regulation 6(3) increases the prescribed equivalents of the primary threshold and the secondary threshold specified in regulation 11 of the Contributions Regulations, for monthly and yearly earnings periods. The prescribed equivalents of the upper earnings limit and the upper secondary thresholds for the Under 21 age group and relevant apprentices remain the same.

Regulation 7 provides for section 2(2) of the Social Security Act 1993 (c. 3) to have effect for the tax year 2022-23. This allows money provided by Parliament to be paid into the National Insurance Fund up to a limit of 17 per cent of the estimated benefit expenditure for the financial year ending with 31st March 2023. Regulation 8 makes corresponding provision for Northern Ireland, by giving effect to article 4(3) of the Social Security (Northern Ireland) Order 1993 (S.I. 1993/592 (N.I. 2)).

In accordance with section 142(1) of the Social Security Administration Act 1992 (c. 5) a copy of the report by the Government Actuary, giving the Actuary’s opinion on the likely effect on the National Insurance Fund of the making of these Regulations, was laid before Parliament with a draft of these Regulations. A copy of the report can be found at https://www.gov.uk/government/collections/uk-social-security-short-term-and-long-term-reports; this is also available to purchase from the TSO Shop on their website at https://www.tsoshop.co.uk/ or by telephone on 0333 202 5070.

A Tax Information and Impact Note has not been prepared for this instrument as it gives effect to previously announced policy and it relates to routine changes to rates, limits and thresholds.