National Insurance contributions (NICs) rates:
The government has proposed a reduction in the main rate of Class 1 employee NICs, lowering it from 12% to 10% starting from January 6, 2024.
Additionally, there is a planned reduction in the main rate of Class 4 self-employed NICs from 9% to 8% effective from April 6, 2024.
Furthermore, starting April 6, 2024, no individual will be obligated to pay Class 2 self-employed NICs. Here are the details of this change:
- From April 6, 2024, self-employed individuals with profits exceeding £12,570 will be exempt from paying Class 2 NICs but will still be eligible for contributory benefits, including the State Pension.
- Those with profits ranging from £6,725 to £12,570 will retain access to contributory benefits, such as the State Pension, through a National Insurance credit without the requirement to pay NICs, similar to the current arrangement.
- Individuals with profits below £6,725 and those who voluntarily pay Class 2 NICs to access contributory benefits, including the State Pension, will continue to have the option to do so.