As mentioned in the UK government’s Autumn 2023 Statement, changes for employed and self-employed individuals with regards to National Insurance contributions will enter into effect from 6 January 2024.
The policy objective is to reduce the rate of National Insurance paid by employees and for self-employed individuals, delivering an effective tax cut for working people.
The rate of Class 1 National Insurance will be reduced from 12% to 10% from 6 January for those eligible to pay Class 1 National Insurance. For self-employed individuals, the main rate of Class 4 National Insurance contributions will decrease from 9% to 8% and the liability to pay Class 2 flat rate National Insurance contributions on profits above GBP 12,570 will be removed. However, this will not affect access to contributory benefits such as state benefit.
If you require any further information, please do contact your usual BDO contact.
Stuart Strong
BDO in United Kingdom