Autumn Budget Summary

The Autumn Statement is usually a dull affair with a handful of updates, but mostly about information to do with how well the economy is doing and how much debt the country is in.

However, there had been rumblings before the statement that there were bigger changes afoot.

National Insurance Contributions (NIC’s)

The most significant changes have been to do with National Insurance Contributions (NIC’s), and it is and adjustment for everyone – employed and self employed.

Employed – employed people will have a cut in their National Insurance rate from 12% to 10% from 6th January 2024. This means all employed people will feel this benefit in their January paycheck of a 2% tax cut.

Self Employed – self employed people currently pay two types of NIC’s – Class 2 & Class 4. Class 4 is paid on profits over and above £12,570.  From April 2024, Class 4 NIC’s are being cut from 9% to 8%, a 1% tax saving.

In addition to this, from April 2024, Class 2 NIC’s are being abolished. Currently, Class2 NIC’s which are £3.45 per week or £179.40 per year, and are paid at the same time as the tax via Self Assessment.  But from April 2024, this will no longer be applicable.

At the moment, those with income between £6,725 and £12,570 are getting their NI credit without having to pay Class 2 NIC’s, so this is effectively being extended for all self employed people earning above £6,725 – they will get a NI credit without making a payment.

However, those with income BELOW £6,725 will need to make voluntary Class 2 NIC payments in order to get there NI credit – which is the same as the current system in place.  So, if you have multiple streams of income which on their own DON’T give you an NI credit for the year, then you need to make sure that you continue paying voluntary Class 2 NIC’s to be able to get full State Pension entitlement.

Veteran NIC relief for employers – The government are also extending their Employers NIC’s relief for hiring qualifying veterans.  This relief means that employers can pay 0% Class 1 NIC’s on income up to £4189.00 that is paid to veteran employees.

Minimum Wage

There have been significant changes on National Minimum wage.  From April 2024, the minimum wag is being increased to £11.44 per hour, and it will be applicable to eligible workers aged 21 years and over (usually the top rate of NMW was for 23 years and older). The new rates will be as follows:

Current From April 2024

23 and over £10.42 £11.44

21 – 22 years £10.18 £11.44

18 – 20 years £7.49 £8.60

Under 18 years £5.28 £6.40

Apprentice £5.28 £6.40

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