A second national insurance cut in three months kicks in this weekend alongside a swathe of employment law changes at the beginning of the tax year.
As announced in the Spring Budget last month, employees’ national insurance contributions will fall from 10% to 8% from Saturday 6 April 2024, making the average earner around £450 better off each year.
The reduction follows a previous national insurance cut in January 2024 when the government reduced the employee rate from 12% to 10% on earnings between £12,571 and £50,270.
Income tax thresholds remain frozen across England, Wales and Northern Ireland, but the Scottish government has introduced a new “advanced” tax band for higher earners.
Until today (5 April), earnings between £43,663 and £125,140 were taxed at 42%, and above £125,140 at 47% in Scotland. From 6 April 2024, earnings between £75,001 and £125,140 are taxed at 45%, and earnings above £125,140 are taxed at 48%.
The freeze on income tax bands in the rest of the UK, which the current government has pledged will continue until 2028, means that despite the national insurance cut, many workers will be paying more income tax as their increased wages push them into higher tax bands.
For the self-employed, national insurance contributions on earnings between £12,570 and £50,270 are being cut from a rate of 9% to 6%.
The government has increased various rates of statutory pay. Statutory sick pay increases from £109.40 to £116.75 per week on 6 April 2024 for employees working five qualifying days per week.
Rates of statutory maternity pay and statutory adoption pay (after first six weeks), statutory paternity pay, statutory shared parental pay and statutory parental bereavement pay all increase to £184.03 per week or 90% of the employee’s average weekly earnings, whichever is lower. The rate for the first six weeks’ statutory maternity or adoption pay remains at 90% of average weekly earnings.
Employment law coming into force on 6 April includes changes to the right to request flexible working, new redundancy protections around pregnancy and family leave, changes to paternity leave, the introduction of one week’s unpaid carer’s leave per year, and changes to holiday pay calculations for irregular hours workers.
National minimum wage increases came into force on Easter Monday, 1 April 2024, with the national living wage rising nearly 10% to £11.44 per hour.
Consult Personnel Today’s round-up of HR’s things to do in April 2024 for more detail.
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