New National Insurance Categories April 2022
There are several new National Insurance categories to be introduced from this April, most are related to the new freeports but there is also one for qualifying veterans. All of the new categories carry relief for employer’s National Insurance contributions.
NI Category V
NI category V provides zero-rate employer’s National Insurance Contributions (NICs) for qualifying veterans for the first year of their civilian employment. This zero rate applies to earnings up to a new Veteran’s Upper Secondary Threshold (VUST), which is inline with other zero rate categories such as category M or H for the under 21s and apprentices respectively.
This NI category is only available from April although the relief has already been available for the current 21 – 22 tax year. The current process is for employers to claim the relief retrospectively after April, so the NI category will be far simpler.
Freeports
Freeports have a number of new categories and there will be some steps for the employer and the employee to be eligible. There are 11 freeports expected and those organisations affected will already be preparing.
F: standard category letter
I: married women and widows entitle to pay reduced NICs
S: employees over state pension age
L: employees who can defer paying 13.25% NICs and only pay 3.25% because they are already paying in another job
The rates of 13.25% and 3.25% appear as appose to the current 12% and 2% because of the health and social care levy as previously announced.
There is also a new upper threshold for freeport categories – Freeports Upper Secondary Threshold (FUST). Currently all upper thresholds are the same except the FUST which is lower, which means that although the zero-rate relief will be available for workers in freeports it will be applied to less earnings than other similar reliefs.
Rates & Thresholds
| Primary Threshold (PT) | Secondary Threshold (ST) | UEL/UST/AUST/VUST | FUST | |
|---|---|---|---|---|
| Monthly | £823 | £758 | £4189 | £2083 |
| Weekly | £190 | £175 | £967 | £481 |
| Category | Employee | Employer (VUST or FUST as applicable) | ||||
|---|---|---|---|---|---|---|
| Below PT | Above PT below UEL | Above UEL | Below ST | Above ST below VUST/FUST | Above VUST/FUST | |
| V | 0 | 13.25% | 3.25% | 0 | 0 | 15.05% |
| F | 0 | 13.25% | 3.25% | 0 | 0 | 15.05% |
| I | 0 | 7.1% | 3.25% | 0 | 0 | 15.05% |
| S | 0 | 0 | 0 | 0 | 0 | 15.05% |
| L | 0 | 3.25% | 3.25 | 0 | 0 | 15.05% |