As announced in the Autumn Statement on 22nd November 2023, the main Class 1 primary rate for National Insurance Contributions (NIC) was reduced from 10% to 12% with effect from 6th January 2024.
Therefore, those employees on weekly pay for work done from 6th January, should get the reduction in NIC and a mini pay rise starting from 13th January. Equally monthly salaried employees will start to see the benefit from their next monthly payslip.
Self employed people will also now start to see the benefit of a reduction of Class 4 (profits above £12,570) from 9% to 8% at the same time as well as the abolition on fixed rate NICs (Class) if profits are over £12,570.
For full details on the National Insurance reductions, see: National Insurance
We have to say, we disagree with the NIC rate cuts. Not withstanding the fact that employers have received no cuts unless they are a small business and already receive the Employers Allowance in addition to limited company business owners still pay the 1.25% high tax rate on dividends that were introduced to deliver more funds for the NHS, when the equivalent employee and self employed rate increases were subsequently removed, it seems it is limited company owners and shareholders are the only ones still paying more to deliver greater funding for the NHS.
Many moaned about the employee NIC increases to fund more NHS services and now they have been removed, they still moan about NHS waiting times and queues in ambulances. We cannot have all the cake and eat it.