National Insurance cut hits payslips

The 27 million UK workers on monthly salaries will have benefited from a cut in the rate of National Insurance in their April payslips.

The April cut to National Insurance Contributions, announced in the Spring Budget in March, has seen the rate paid fall from 10% in January (and 12% in April 2023) to 8%. Employer National Insurance Contributions paid by businesses remains unchanged.

Over 2 million self-employed people will also benefit from the main rate of Class 4 NICs being cut from 9% to 6% alongside the abolition of the requirement to pay Class 2 NICs when they submit tax returns for the 2024-25 tax year.

The latest cut is part of longer term government ambitions to phase out employee and self-employed National Insurance Contributions entirely.

To mark the cuts to National Insurance Contributions, HMRC launched an updated online tool earlier this month to help people understand how much they will now expect to pay in National Insurance this year.

Prime Minister Rishi Sunak said:

“We have now cut National Insurance by £900 [based on an average employee salary of £35,400] because it’s unfair that workers pay double tax on their income. We need to make it much simpler and much fairer and we are going to continue cutting this tax until it’s gone – while continuing to protect pensioners with the triple lock and providing record levels of funding to the NHS.“

Chancellor of the Exchequer Jeremy Hunt said:

“We’re on the right track – we’ve been able to slash National Insurance to return hundreds of pounds back into the pockets of hard-working Brits because of the decisions we’ve made to manage the economy responsibly.

“Over the years ahead we want to get rid of National Insurance completely for workers – it is an unfair double tax on work and we’ve shown we can protect spending on public services while eliminating it.“