Boris Johnson has made a revolutionary change in increasing the rate of national insurance by 1.25% from 22/23 to pay for social care.

This means that employees will now pay Primary Class I NIC at 13.25% and 3.25% instead of 12% and 2%.

Employers will pay Secondary Class 1 NIC and Class 1A NIC at 15.05% instead of 13.8%

Self employed individuals at 10.25% and 3.25% instead of 9% and 2%.

There are also changes to the tax rates for dividends. The £2,000 exemption has been retained but the tax rates have increased by 1.25%.

Instead of 7.5%, 32.5% and 38.1% tax rates, the rates from 22/23 will be increased to 8.75%,33.75% and 39.35%

If you earn £30,000 a year, you will pay an extra £255 a year in tax.

If you earn £40,000 a year, you will pay an extra £381 a year in tax.

If you earn £50,000 a year, you will pay an extra £505 a year in tax.

If you earn £60,000 a year, you will pay an extra £631 a year in tax.

If you earn £80,000 a year, you will pay an extra £880 a year in tax.

If you earn £100,000 a year, you will pay an extra £1,130 a year in tax.

While no one likes tax rises, I can see the benefit of increased social care being necessary as our population grows older. The pandemic has taught us to value the simple things in life and by all of us paying a bit more in tax, it will help those less able.

If you want to master tax, I recommend you get a copy of Advanced Tax Condensed to help you. This uses fun pictures and colour to quickly master the key information.