Payroll | CIS | Auto Enrolment

Spring Statement 2022

April 6, 2022

The Chancellor, Rishi Sunak announced in his Spring Statement that he has unveiled a new Tax Plan to help ease the rising cost of living.

The news comes as Rishi Sunak announces a tax cut for UK workers through a rise in the National Insurance thresholds which comes into effect from July 2022.

The new National Insurance threshold will now be £12,570, the same as the Personal Tax Allowance. This means that from July, 70% of workers will now pay less National Insurance, even after accounting for the Health and Social Care Levy.


What this means for employees

  • Between 6 April and 5 July 2022, employees will be able to earn £190 a week and £823 a month without paying Class 1 NICs and the Levy.
  • Between 6 July 2022 and 5 April 2023, this threshold will increase to £242 weekly and £1,048 per month.

Rishi Sunak also announced an increase to the Employment Allowance of £4,000 to £5,000 which smaller businesses can benefit from to reduce their employers National Insurance. This comes into effect from 6th April 2022.


Further Information

The basic rate of income tax will be cut by 1p in the pound so from 20% to 19%, however this is set to come into force from 2024-2025.


National Minimum Wage

Changes from April 2023 are as follows: –

Current Year

23 & over

21 to 22

18 to 20

Under 18


April 2023






Previous Year

23 & Over

21 to 22

18 to 20

Under 18


April 2022






Income Tax and National Insurance

Income Tax thresholds as indicated below:

Personal allowance: £12,570

Standard Tax code: 1257L

Income tax: £12,571 – £50,270 @ basic rate 20%

                  £50,271 – £125,140 @ higher rate 40%

                      Over £125,140 @ additional rate 45%

Student Loan thresholds: Plan Type 1 £1834 per month

                                       Plan Type 2 £2,274 per month

                                       Plan Type 4 £2,305 per month

                                       Postgraduate Loan £1,750 per month

National insurance primary threshold: increase from £823 to £1048 per month or £190 to £242 per week.

National insurance secondary threshold: Is £758 per month or £175 per week.

Statutory Payments

The earnings threshold for statutory payments increases from £120 per week to £123 per week

Statutory maternity pay/statutory adoption pay: weekly rate increase from £156.66 to £172.48; the first 6 weeks will remain at 90% of the employee’s average weekly earnings

Statutory paternity pay/shared parental pay: weekly rate increases to £172.48

SSP: weekly rate increases from £99.35 to £109.40

Auto Enrolment

The Automatic Enrolment earnings threshold will remain at £10,000. The lower earnings limit of the qualifying earnings band will remain at £6,240 and the upper earnings limit of the qualifying earnings band will remain at £50,270.

Minimum pension contributions remain at 3% employer and 5% employee

Employment Allowance

Only businesses with an employer national insurance bill of £100,000 or less in the previous tax year will be eligible to claim Employment Allowance.

For businesses who are eligible to claim it, the Employment Allowance is £5000 for the year.

Spring Statement 2022