On 7 September the Government announced that they intend to increase the rates of National Insurance Contributions (NIC) and dividend tax from April 2022.

National Insurance

From 1 April 2022:

  • A temporary 1.25% increase in Class 1 (employee and employer’s) NIC.
  • The self-employed Class 4 NIC rate will also rise on a temporary basis by 1.25%.

The Levy

From April 2023, the increase will be legislated as a separate, ring-fenced “health and social care levy” (the levy), NIC rates will then fall back to 2021/22 levels.

The changes from 2023 will affect all working adults, including those over state pension age (currently 66).  This means from April 2023 those aged 66 and over, who are still in employment or self-employed, will pay the new 1.25% levy, but not until April 2023.  The new levy will be shown separately on payslips and will constitute a formal legal surcharge.

Voluntary contributions such as Class 2 and 3 are unaffected by the levy.

Employee Class 1 (main rate /higher rate) Employer Class 1 Self-employed Class 4 (main rate/higher rate)

2021/22 NIC rates


12% / 2%




9% / 2%


2022/23 NIC rates


13.25% / 3.25%




10.25% / 3.25%


2023/24 NIC rates


12% / 2%




9% / 2%


2023/24 Health and Social Care Levy








Dividend Tax Rates

In a similar measure, the Government also announced that all dividend rates would increase from April 2022 by 1.25%, although the £2,000 dividend allowance would remain.

Basic rate taxpayers Higher rate taxpayers Additional rate taxpayers

Dividend Tax Rates 2021/22








Dividend tax rates 2022/23








If you have any questions about how these rates apply to you, please contact our Tax team.

Please note that this blog is provided for general information only. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content of this blog.

Edwin Coe LLP is a Limited Liability Partnership, registered in England & Wales (No.OC326366). The Firm is authorised and regulated by the Solicitors Regulation Authority. A list of members of the LLP is available for inspection at our registered office address: 2 Stone Buildings, Lincoln’s Inn, London, WC2A 3TH. “Partner” denotes a member of the LLP or an employee or consultant with the equivalent standing.

Please also see a copy of our terms of use here in respect of our website which apply also to all of our blogs.

Latest Blogs See All

Share by: