As part of his 2023 Autumn Statement the chancellor, Jeremy Hunt, announced that there would be a reduction in the national insurance rate from 6th January 2024. These changes will affect both employees and those who are self employed. In this article, our payroll team explain how these changes might affect you.
National insurance is a tax on earnings or self-employed profits.
National insurance contributions help to pay for some benefits and the state pension. Making National Insurance contributions also earns you right to certain benefits and the state pension.
It is collected through the PAYE system if you are employed and through Self Assessment if you are self-employed.
All workers, both employed and self-employed aged from 16 years to retirement age who earn above a certain amount will make National Insurance contributions. The amount of National Insurance that you pay will depend on how much you earn.
The National Insurance rate has reduced from 12% to 10% on annual earnings between £12,570 and £50,270. This means that the average employee who earns £35,400 will be £450 per year better off. These changes will take place from 6th January 2024 meaning that many employees will see the effects of these changes in their January payslips.
Our friendly and helpful approach to accountancy, ensures that you understand and are in tune with your finances. Our committed team will communicate with you every step of the way so that you understand the position of your financial affairs – get in touch today.