Cuts to National Insurance Contributions (NICs) came into effect from 6 April 2024.
This follows on from several tax changes introduced on 1 April, including an increase to the VAT threshold to £90,000. NICs for the self-employed (Class IV) will be cut to six per cent, down from nine per cent, with employees (Class I) NICs cut by a further two per cent to eight per cent – this is on top of the two per cent cut announced by the Chancellor in October 2023.
Compulsory Class II NICs will also be abolished from 6 April. Employers should check with their payroll system provider that appropriate changes to Class I NICs have been made. Most electronic payroll systems should be updated automatically by providers.
This will save £650 for the average self-employed person earning £28,000.