National Insurance Changes Have Reduced Financial Pressures
The Chancellor announced changes to National Insurance Contributions (NICs) in the Autumn Statement, which the Federation of Small Businesses (FSB feel will help to ‘ease the burden on strivers up and down the country’.
Over 27 million workers across the country, will welcome cuts Jeremy Hunt outlined in his Autumn Statement speech, which will reduce the main rate of employee NICs from 12% to 10% effective from 6 January 2024. The Chancellor’s example to demonstrate the saving highlighted that the average employee earning £35,400 per year, will benefit from a £450 annual tax cut.
The abolition of Class 2 NICs and cuts to Class 4 NICs from 9% to 8%, which will be effective from 6 April 2024 have been implemented to ensure that people, who are self-employed will also have more disposable income.
This initiative is focused on putting money back into the pocket of consumers to ensure they have more disposable income in order to facilitate economic growth.
Tina McKenzie, Policy Chair at the FSB, feels that:
‘The Chancellor’s decision to reduce the rate of self-employed NICs and abolish the Class 2 element is extremely welcome, easing the burden on strivers up and down the country.
‘The FSB has long campaigned for the abolition of the Class 2 element of NICs and the reduction of Class 4, and we are therefore pleased that the Chancellor has acted.’
Amy Telford’s, Director, at HTB viewpoint on the National Insurance rate reductions is that: “This will be a welcome financial boost for people, who have been struggling with the financial challenges the exceptionally high cost of living is bringing to many households across the country.
HTB are on hand to support with ensuring the efficiency and accuracy of your payroll, should you have any queries regarding the reduction in NIC.”
We are always here for you to contact us for support with any payroll queries you may have, we’d love to help.