This Library briefing gives an overview of the way that the profits from North Sea oil and gas production are taxed, and how the fiscal regime that applies to North Sea oil and gas production has been reformed in recent years
In his Spring Statement on 23 March 2022 the Chancellor Rishi Sunak announced an increase to the annual National Insurance thresholds for employees, and for the self-employed – that is, the point at which individuals start to pay the main rate of National Insurance contributions (NICs) on their earnings, or their profits.
Details of this proposed increase to National Insurance thresholds are set out in the Spring Statement:
“The annual National Insurance Primary Threshold and Lower Profits Limit, for employees and the self-employed respectively, will increase from £9,880 to £12,570 from July 2022. This increase will benefit almost 30 million people, with a typical employee saving over £330 in the year from July. Around 70% of NICs payers will pay less NICs, even after accounting for the introduction of the Health and Social Care Levy. Around 2.2 million people will be taken out of paying Class 1 and Class 4 NICs and the Health and Social Care Levy entirely, on top of the 6.1 million who already do not pay NICs. July is the earliest date that will allow all payroll software developers and employers to update their systems and implement changes.”
It is estimated that the annual cost of this measure will be £6.25 billion in 2022/23, falling each year to £4.50 billion by 2026/27.
The following day the Government introduced the National Insurance Contributions (Increase of Thresholds) Bill. The Bill completed all of its stages in the Commons that day, when it was agreed without amendment (HC Deb 24 March 2022 cc462-525; Votes and Proceedings No.41, 24 March 2022). The Bill completed all of its stages in the Lords on 30 March (HL Deb 30 March 2022 cc1611-26; cc1651-59), and this legislation received Royal Assent the following day (Votes and Proceedings No.145, 31 March 2022). The Bill and its explanatory notes, as well as details of its parliamentary progress, are available on its Bill page on Parliament.uk.
This landing page collates official documents on this measure, and associated material.
HM Treasury and HM Revenue & Customs
HM Revenue & Customs, National Insurance: Increase to Primary Threshold and the Lower Profits Limit and reduction in Class 2 liability of those earning between the Small Profits Threshold and Lower Profits Limit, 23 March 2022
HM Revenue & Customs, National Insurance Contributions (Increase of Thresholds) Bill, 23 March 2022
HM Treasury press notice, Chancellor announces tax cuts to support families with cost of living, 23 March 2022
HM Treasury, Spring Statement 2022: Factsheet on Personal Tax, 23 March 2022.
Torsten Bell and others, Inflation Nation: putting the Spring Statement in context, 24 March 2022.
Paul Johnson and others, Spring Statement 2022 – An initial response from IFS researchers, Institute for Fiscal Studies, 23 March 2022.
Low Incomes Tax Reform Group press notice, Tax campaigners welcome NIC threshold increase as step towards simplification, 23 March 2022.
Adam Corlett and Torsten Bell, Softening the Blow, Resolution Foundation, 21 March 2022 (the paper includes a discussion of the option for increasing National Insurance thresholds).
House of Commons Library
Spring Statement 2022: a summary, Commons Library briefing, 24 March 2022.
Health and Social Care Levy, Commons Library briefing, 16 November 2021.
National Insurance contributions: an introduction, Commons Library briefing, 16 December 2019.