Press release
6 March 2024
Rachel McEleney, associate tax director at Deloitte, comments on today’s Budget:
“The Chancellor announced today that the rate of national insurance payable by employees on earnings between £1,048 and £4,189 per month will reduce from 10% to 8% from 6 April 2024. This will result in a UK taxpayer’s national insurance deductions reducing by up to £62.82 per month (£754 per year). This follows a similar rate reduction from 6 January 2024. The 2% rate that applies to earnings above £4,189 per month remains in place and the thresholds are unchanged.
"This is the third substantial national insurance cut for employees since the Spring Statement in March 2022, when the lower threshold was increased from £823 to £1,048. Without these three changes, an employee earning £35,000 would be paying national insurance of about £2,809 in 2024/25. The actual figure will now be about £1,794, a reduction of £1,015.
"This more than makes up for the extra £532 of income tax due as a result of the personal allowance freezeat £12,570. Had it not been frozen, the personal allowance would be £15,230 in 2024/25. This means most employees earning more than £23,000 will save more in national insurance than they lose in income tax, albeit by different amounts dependent on salary.
"The main rate of national insurance payable by the self-employed for profits between £12,570 and £50,270 will be reduced to 6% from 6 April 2024, a change from the 9% to 8% reduction previously announced in the Autumn Statement. This means that overall, the self-employed will pay up to £1,310.40 less in national insurance in 2024/25 compared to 2023/24.
"The cost of the national insurance measures announced today totals about £10bn per year, making it by far the most expensive item in today’s Budget. An equivalent cut in the basic rate of income tax would have cost closer to £15bn per year.”
Ends
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Deloitte spokespeople
Deloitte has a range of spokespeople available to comment on today’s Spring Budget. They can be reached on 020 7007 3333 or 0207 303 5054 or one of the following numbers:
• Debapratim De - senior economist (07884 765916)
• Amanda Tickel - head of tax policy (07920 270 964)
• Rachel McEleney - personal tax (07826 891 752)
• Zubin Patel - corporate tax (07586 511 104)
• Michael Nicolaides - employment tax (07768 178264)
• Richard Johnson – business rates (07774 337 581)
• Toby Price – stamp duty (07774 337 581)
• Gareth Pritchard – indirect tax (07586 511 104)
About Deloitte
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Deloitte LLP is a subsidiary of Deloitte NSE LLP, which is a member firm of DTTL, and is among the UK's leading professional services firms.
The information contained in this press release is correct at the time of going to press.
For more information, please visit www.deloitte.co.uk.