The recently unveiled Autumn budget statement 2023, presented on November 22nd, carries significant implications for the upcoming financial year. Let's discuss the key changes and reflect and learn the impact on your financial landscape.
National Insurance changes:
For the self-employed, starting April 6, 2024, Class 2 National Insurance will be eliminated, and the main rate (Class 4 NICs) will decrease to 8%. Meanwhile, employees will see a reduction in National Insurance from 12% to 10%, effective January 6, 2024.
"National Insurance and welcomes the Restart program extension. However, the a need for a more comprehensive industrial strategy, particularly in skills development."
Pension updates:
State pensions will see an 8.5% increase in April 2024, aligned with average earnings growth. A ground breaking consultation is underway to explore a lifetime provider model for employee pensions, aiming to streamline pension management during job changes.
Minimum wage and living wage:
Effective April 2024, both the national minimum wage and national living wage will see increases, reflecting the government's commitment to ensuring fair compensation for workers.
Other areas of interest:
The budget extends National Insurance relief for veterans and investment zones. Employers hiring veterans will enjoy relief from employer NICs on earnings up to £50,270 for the first year of employment. Investment zones will now benefit from extended relief periods, and freeports will continue to offer a zero rate of secondary class 1 NICs on new employees' earnings until 2031. All benefits, including Universal Credits, the blind person's allowance, and the married couple's allowance, will be updated by the September 2023 Consumer Price Index inflation rate of 6.7%.
Insights from REC and APSCo:
Neil Carberry, REC Chief Executive, commends the reduction in employees' National Insurance and welcomes the Restart program extension. However, he emphasizes the need for a more comprehensive industrial strategy, particularly in skills development.
Tania Bowers, APSCo Global Public Policy Director, expresses satisfaction with set-off proposals to off-payroll rules. She supports the expansion of Investment Zones and encourages recruitment firms to invest in growth plans with permanent full expensing. Bowers also calls for reforms in apprenticeships and addressing the skills deficit.
The Autumn Budget 2023 introduces substantial changes in National Insurance, pensions, wages, and more. Staying informed and adapting to these changes is crucial for individuals and businesses to navigate the opportunities and challenges in the upcoming financial year.
If you have any questions, please do not hesitate to contact us at Giant Finance+.