On 6 March 2024, the Chancellor of the Exchequer, the Rt Hon Jeremy Hunt MP, unveiled the Spring Budget, outlining key reforms aimed at simplifying the tax system, ensuring fairness, adapting to economic changes, and supporting public finances. Among the significant tax measures announced, there are a few highlights that may directly impact you as employers.
- Reduction in National Insurance Contributions (NICs):
- The government has announced a reduction in the main rate of Class 1 employee NICs from 10% to 8%, effective from 6 April 2024.
- Additionally, taxes for the self-employed will see a further reduction of 2 pence, on top of the previously announced 1 pence cut to 8%.
- This means that starting from April 2024, the main rate of Class 4 NICs for the self-employed will be reduced from 9% to 6%.
- High Income Child Benefit Charge (HICBC) Threshold Increase:
- From 6 April 2024, the threshold for the High Income Child Benefit Charge will rise to £60,000, with a taper up to £80,000.
- The charge will be 1% of the Child Benefit for every £200 of income exceeding £60,000, equating to the benefit being fully charged for income exceeding £80,000.
Your employees may find it beneficial to claim or restart Child Benefit payments, especially if they have previously opted out. The charge is tapered, making it financially worthwhile for individuals or their partners earning between £60,000 and £80,000 to claim. Claims for Child Benefit can be conveniently made through the HMRC app or online, with automatic backdating for up to 3 months, or from the child’s date of birth if later.
New guidance on the charge has been published today, which you may wish to share with your employees.
For more detailed information on both the NICs and High Income Child Benefit Charge measures, please visit GOV.UK.
Information on all of the measures announced can also be found on GOV‌‌‌.UK.
For an overview of all the tax legislation and rates announced, read the Overview of tax legislation and rates (OOTLAR).
If you have any questions or require further assistance, please do not hesitate to contact us.
