All employers have a responsibility to deduct National Insurance from their employees’ wages before paying it to HM Revenue and Customs on their behalf.
National Insurance is a type of tax that is paid, which allows you to claim certain benefits and the state pension. Employees earning over £242 per week from one job, who are over the age of 16, are eligible to pay National Insurance contributions. Businesses must ensure that they have an effective payroll system in order to manage both wages paid and contributions collected.
National Insurance in 2025
In 2025, the main rates of both tax and National Insurance contributions will not increase for workers. However, there are changes that affect businesses directly.
Businesses will change from paying a rate of 13.8% on employees’ earnings over £9,100 per year. From April 2025, this will change to paying a rate of 15% National Insurance contributions on any salary that is over £5,000 per year.
Self-employed workers were previously required to pay a separate category of National Insurance contributions, referred to as class 2 contributions. However, they will no longer be required to do so. There will continue to be a 2% rate of National Insurance contributions that applies to all incomes and profits that exceed the figure of £50,270 per annum.
Businesses, payroll, and those who are self-employed should ensure that they are fully versed in the changes to NI contributions, to ensure that they are collecting the correct amount to pay to HMRC.
Accountancy Services
Elements of payroll, including National Insurance contributions and tax, can be a complicated minefield for businesses. Enlisting the help of a professional accountancy service is a cost-effective means of navigating the system while ensuring that you are fully compliant with UK legislation.
Specialist business accountants Bristol, such as https://www.hazlewoods.co.uk/expertise/business-accountants/bristol, can offer advice, assistance, and accountancy services to businesses and their payroll departments regarding National Insurance and Tax contributions.
Business accountants can also assist with other matters, including start-ups, statutory accounts, tax, and international support.
