Changes to National Insurance

by | Mar 19, 2024 | Budget, News

With the changes to National Insurance recently announced find out below how will it affect you.

Every employee is liable to pay Class 1 National Insurance Contributions (NICs) on earnings over £12,570 and every self-employed individual is liable to pay Class 4 NICs on earnings over £12,570.

From 6 April 2024, the new measure reduces the main rate of employee Class 1 NICs by 2 percentage points from 10% to 8%. For the self-employed, the main rate of Class 4 NIC will be reduced by 2 percentage points, from 8% to 6%.

Employee Example – Class 1 NICs

 Before NIC change After NIC change
Gross earnings£25,000Gross earnings£25,000
Less: personal allowance(£12,570)Less: personal allowance(£12,570)
Net earnings£12,430Net earnings£12,430
Class 1 NIC @ 10%£1,243Class 1 NIC @ 8%£994.40

The change gives rise to a £248.60 tax saving per annum.

Earnings above the upper weekly limit of £50,270 are still charged at 2%.

Self-employed Example – Class 4 NICs

 Before NIC change After NIC change
Taxable profit£25,000Taxable profit£25,000
Less: personal allowance(£12,570)Less: personal allowance(£12,570)
Net earnings£12,430Net earnings£12,430
Class 4 NIC @ 8%£994.40Class 4 NIC @ 6%£745.80

This change gives rise to a £248.60 tax saving per annum.

Earnings above the upper annual limit of £52,270 are still charged at 2%.

These changes in national insurance are significant and can positively impact individuals’ take-home pay and overall financial health. It’s essential to stay informed and understand how these adjustments may affect you.

At WBV, Swansea and Neath, we’re here to help navigate these changes and ensure you’re maximising your financial opportunities. Whether you’re an employee or self-employed, our experts can provide tailored advice and support.

Don’t miss out on the opportunity to benefit from these changes. Contact WBV, Swansea or Neath today to learn more and secure your financial future.

Read more here about the Budget