Changes to National Insurance Contribution rates to take effect on 6 April 2024
The Chancellor announced in his Budget on 6 March 2024:
- a cut to the main rate of Class 1 employee National Insurance Contribution (NICs) rate from 10% to 8%
- a further 2p reduction to the main rate of Class 4 NICs for the self-employed, on top of the 1p cut to 8% previously announced at Autumn Statement, which means the rate is reduced from 9% to 6%.
Also taking effect on 6 April are self-employed NICs changes announced previously in the Chancellor’s Autumn Statement 2023. The government is simplifying the NICs system for the self-employed who have, to this point, been required to pay two separate charges for NICs, under both Class 2 and Class 4 in order to access contributory benefits. From 6 April, these Class 2 contributions will no longer be compulsory but can be paid voluntarily.
HMRC guidance will be updated shortly, and the government will consult on the details of the Class 2 reform later this year.
You can read more about National Insurance changes in the Spring Budget Personal Tax Factsheet and self-employed National Insurance rates on GOV.UK.
Child Benefit changes from 6 April
High Income Child Benefit Charge
The threshold at which people start paying the High Income Child Benefit Charge (HICBC) will increase from £50,000 to £60,000 from 6 April, and the taper will be extended up to £80,000.
For instance, you’ll be charged 1% of your Child Benefit for every £200 of income that exceeds £60,000. If your income exceeds £80,000, the charge is equal to the amount of the Child Benefit payment.
Parents who have not claimed Child Benefit, or who have claimed it but opted out of receiving it, and who earn between £60,000 and £80,000, will now benefit from claiming and receiving Child Benefit.
People in this category are advised to wait until after 6 April 2024 before acting, to prevent having to pay the charge for the 2023-24 tax year.
The quickest and easiest way to get payment from 6 April is through the free HMRC app or online.
Child Benefit rates
To help boost family budgets, the amount parents will receive for their first child is increasing to £25.60 per week and £16.95 for each additional child. There is no limit on the number of children parents and carers can claim for.
We’d really appreciate your support in sharing this information with your networks, so they can support parents in claiming or opting into payments from the 6 April on the HMRC app or online.
Stopping paper repayment notifications for Corporation Tax and Self Assessment
We’re changing how we let customers know we’ve issued a repayment by:
- BACS – Corporation Tax
- Credit/debit card – Corporation Tax and Self Assessment
From 8 April 2024, we’ll no longer send a letter notifying customers or their agents of a repayment, as these letters often arrive after the repayment has been made, leading to confusion and increased contact from customers. We stopped sending Self Assessment notifications for BACS repayments in December 2023.
Customers will still receive repayments into their chosen bank account or credit card balance as usual, and can see any transactions in their online account on GOV.UK.
Agents can also review transactions on their clients’ behalf using HMRC’s online services for agents account on GOV.UK.