The UK Chancellor's 2024 Spring Budget introduced further modifications to National Insurance (NI) contributions.
These changes, backed by tangible figures, reflect the government's commitment to achieving a balance between keeping the economy stable and making work fairer for everyone. It is important to note that these National Insurance changes will come into effect from 6th April 2024.
One of the most significant announcements to come from the Spring Budget on 6th March was the further cut of 2% in National Insurance for employees and the self-employed.
In the Autumn Statement on 22nd November 2023, the Chancellor announced a welcome reduction in the main rate of Employee Class 1 NICs, decreasing from 12% to 10% from January 2024. This affected any employee eligible to pay National Insurance, and this 2% cut gave an annual saving of £754 for anyone on a salary of £50,270 and above.
Following the further cuts in the Spring Budget, those earning £50,270 and above will save an additional £754 annually. This means extra net pay of around £125 per month compared to the position before the cuts announced in the Autumn Statement.
The below table compares the employee National Insurance contributions for the tax years 2024/25 and 2023/24, based on the position before the 2023 Autumn Statement.
| Annual Salary | NICs in 2023/24 | NICs in 2024/25 |
| £20,000 | £892 | £594 |
| £30,000 | £2,092 | £1,394 |
| £40,000 | £3,292 | £2,194 |
| £50,000 | £4,492 | £2,994 |
| £60,000 | £4,719 | £3,210 |
| £70,000 | £4,919 | £3,410 |
| £80,000 | £5,119 | £3,610 |
| £90,000 | £5,319 | £3,810 |
| £100,000 | £5,519 | £4,010 |
Self-employed:
The self-employed will also benefit from the Chancellor’s cuts. The Chancellor decided to abolish Class 2 National Insurance Contributions for the self-employed in his Autumn Statement, to take effect on 6th April 2024. Along with this the rate of Class 4 NICs, which is paid on self-employed profits of between £12,570 and £50,270, had been due to fall from 9% to 8%. However, following the Spring Budget, this will now be cut by a further 2%, so down to 6% from 6 April 2024.
If you have any queries or concerns about these changes, then you should speak to your advisers who can help you navigate the changes and help you to ensure you are compliant with them. For more information on how we could help you and your business, please contact us at info@oldfieldadvisory.com or call 02476673160.
Please note: This article is provided for information only and was correct as at time of writing (13/03/24). Any lists and details provided above are not exhaustive and are not intended to be full and complete guidance. No action should be taken without consulting detailed legislation or seeking independent professional advice. Therefore, no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this article can be accepted.
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