National Insurance: What are NI and income tax and what do I pay?

Published On Nov 15, 2022, 12:40 PM

The UK government has announced there will be no increase in income tax and National Insurance (NI) rates ahead of the upcoming budget. However, indications suggest that the employer's NI rate may increase to address a £22 billion budget shortfall. While NI rates for workers and the self-employed were cut in 2024, the freeze on tax thresholds will likely result in more individuals paying higher overall taxes. In 2024-25, average earners could see a small tax cut due to the NI changes, but benefits will diminish by 2027. Comparatively, the UK's overall tax levels are high historically and in relation to other G7 countries, with projections indicating the highest taxation levels in 80 years by 2028-29.