The UK Government has extended the voluntary National Insurance deadline to 31 July 2023 to give taxpayers more time to fill gaps in their National Insurance record and help increase the amount they receive in State Pension.
This comes after members of the public voiced concern over the previous deadline of 5 April 2023.
The deadline extension was announced in a Written Ministerial Statement last week (7th March) and HM Revenue and Customs (HMRC) is urging taxpayers to ensure they don’t miss out.
Anyone with gaps in their National Insurance record from April 2006 onwards now has more time to decide whether to fill the gaps to boost their new State Pension. Any payments made will be at the lower 2022 to 2023 tax year rates.
As part of transitional arrangements to the new State Pension, taxpayers have been able to make voluntary contributions to any incomplete years in their National Insurance record between April 2006 and April 2016, to help increase the amount they receive when they retire. And after an increase in customer contact, the UK Government has extended the deadline l.to ensure people have time to make their contributions.
Victoria Atkins, The Financial Secretary to the Treasury, said: “We’ve listened to concerned members of the public and have acted.
“We recognise how important State Pensions are for retired individuals, which is why we are giving people more time to fill any gaps in their National Insurance record to help bolster their entitlement.”
Thousands of taxpayers with incomplete years in their National Insurance record could be financially better off in their retirement if they make voluntary payments to top up any incomplete or missing years.
The UK Government has extended the voluntary National Insurance deadline to 31 July 2023 to give taxpayers more time to fill gaps in their National Insurance record and help increase the amount they receive in State Pension.
This comes after members of the public voiced concern over the previous deadline of 5 April 2023.
The deadline extension was announced in a Written Ministerial Statement last week (7th March) and HM Revenue and Customs (HMRC) is urging taxpayers to ensure they don’t miss out.
Anyone with gaps in their National Insurance record from April 2006 onwards now has more time to decide whether to fill the gaps to boost their new State Pension. Any payments made will be at the lower 2022 to 2023 tax year rates.
As part of transitional arrangements to the new State Pension, taxpayers have been able to make voluntary contributions to any incomplete years in their National Insurance record between April 2006 and April 2016, to help increase the amount they receive when they retire. And after an increase in customer contact, the UK Government has extended the deadline l.to ensure people have time to make their contributions.
Victoria Atkins, The Financial Secretary to the Treasury, said: “We’ve listened to concerned members of the public and have acted.
“We recognise how important State Pensions are for retired individuals, which is why we are giving people more time to fill any gaps in their National Insurance record to help bolster their entitlement.”
Thousands of taxpayers with incomplete years in their National Insurance record could be financially better off in their retirement if they make voluntary payments to top up any incomplete or missing years.
30 million people across the UK will benefit from the biggest personal tax cut in a decade from today
‘Hard working Brits’ will save up to £330 per year – 2.2 million lifted out of personal tax altogether
70% of UK workers now paying less National Insurance, even after accounting for the Health and Social Care Levy
30 million people across the UK will benefit from the biggest personal tax in a decade from today – with hard working Brits saving up to £330 per year.
The £6 billion tax cut will see the level at which people start paying National Insurance rise to £12,570 – lifting 2.2 million people out of paying any personal tax and ensuring people get to keep more of the money they earn.
The threshold change means that 70% of UK workers will pay less National Insurance, even after accounting for the Health and Social Care Levy that is funding the biggest catch up programme in NHS history and putting an end to spiralling social care costs.
Speaking before his resignation last night, formerChancellor of the Exchequer Rishi Sunak said: “I know rising prices are putting pressure on hard-working families across the UK – which is why we’ve stepped in to help to ease the burden with a £37 billion package of support this year, including at least £1,200 going directly to the 8 million most vulnerable families.
“Today marks the next stage in that package, with the biggest personal tax cut in over a decade coming in to help millions of workers across the UK keep up to £330 more each year.”
The Prime Minister (at time of writing, anyway – Ed.) said: “We know it’s tough for many families across the UK, but we want you to know that this government is on your side.
“Today’s tax cut means around 70 per cent of British workers will pay less National Insurance – even after accounting for the Health and Social Care Levy that is funding the biggest catch up programme in NHS history and putting an end spiralling social care costs.
“So whether you are a receptionist, work in hospitality or are a delivery driver, this tax cut is likely to make you and your family better off.”
From today the level at which people start paying National Insurance has risen from £9,880 to £12,570.
This change means that millions of people working across hundreds of different industries across the UK will now be better off.
This includes bricklayers who’ll save £218, care workers who’ll save £324, hairdressers who will get a £118 benefit and nursery assistants who’ll get a £343 yearly boost.
Workers can check their salary in the government’s online tool to estimate the amount they could save between July 2022 to July 2023.
The last major personal tax cut of today’s magnitude was nearly ten years ago, when the income tax personal allowance increased by £1,100 in 2013. Today’s threshold change is more than double that, as working people are now able to hold on to an extra £2,690 free from tax.
Today’s change to National Insurance thresholds comes as part of the Chancellor’s wider vision for a lower tax economy. At the Spring Statement Mr Sunak announced a 1p income tax cut in 2024 – which will be the first cut to the basic rate in 16 years and will save the average taxpayer a further £175 a year.
The Chancellor also committed to cutting and reforming business taxes later this year in the autumn, to help spur business growth and productivity. The government is currently working with industry on how best to do that.
The increase to the National Insurance thresholds will leave around 76% of National Insurance payers in the North East better, 75% in the North West and Merseyside, and 62% in London.
Today’s landmark personal tax cut also comes as the government launched new Help for Households campaign designed to raise awareness and signpost people to the £37 billion in support on offer and targeted at those most in need.
The support provides millions of the most vulnerable households at least £1,200 of support in total this year to help with the cost of living, with all domestic electricity customers receiving at least £400 to help with their bills.
It also includes a 5p fuel duty cut – the biggest cut ever to fuel duty rates, a rise in the national living wage to give full time workers an extra £1,000 and a cut to the Universal Credit taper rate to provide over 1 million families an extra £1,000.
The NICs threshold change takes effect following the government making tough but responsible decisions to manage the public finances responsibly and choosing not to saddle future generations with almost £400 billion of debt used to protect jobs and the economy during the pandemic – worth around £5,500 for every person in the UK.
The government had planned for this good news story to be the big news event of today, but those plans were scuppered by the resignation of two senior cabinet ministers last night. As former Prime Minister Harold MacMillan once ruefully observed: “Events, dear boy. Events” …
A local tax specialist is urging small businesses to spring clean their finances as they tackle a raft of changes from this April.
Alan Johnston, who runs TaxAssist Accountants in Goldenacre, said: “Although the Government has now decided not to increase National Insurance contributions for self-employed people following a major backlash, other announcements in the Spring Budget added to a long list of changes and new responsibilities for small businesses. We want to ensure that local business owners make the most of all relevant tax breaks and don’t get caught out by the new rules.
“Although some of the changes, such as reduced dividend tax allowance for director-shareholders, will not start until next year, there are significant challenges for local business owners which come into force from April this year.”
Key changes from April 2017 include:
Corporation tax is cut to 19%
VAT registration threshold rises from £83,000 to £85,000
Businesses with very low cost bases who participate in the VAT flat rate scheme will pay a 16.5% fixed rate, they will however continue to charge VAT at 20%
The National Living Wage rises to £7.50 an hour
The cash basis accounting threshold for small businesses rises from £83,000 to £150,000
Many local businesses will reach their staging date for workplace pensions and must automatically enrol eligible staff in a scheme and contribute to their pension pot
And although unincorporated businesses with turnover below the new £85,000 VAT registration threshold have been given a further year to comply with quarterly reporting to HMRC, we’re urging local business owners to continue their vital progress on preparing for the new digital tax rules.
TaxAssist Accountants Goldenacre is a local business providing tax and accountancy advice and services purely to small businesses.
