ICB will be providing full coverage of the 22 November 2023 Autumn Statement from a payroll perspective. However, one announcement requires urgent action that members need to be aware of.
From 06 January 2024, the main rate of Class 1 Primary (employee) National Insurance Contributions will reduce from 12% to 10%. This is within the current tax year. The following will be affected:
· All employees on category letters A, F, H, M and V
· All employee earnings between the Primary Threshold and the Upper Earnings Limit
|
Band
|
Standard
|
Pensioners
|
Reduced
|
Deferred
|
|
Table Letters
|
A / F / H / M and V
|
C / S
|
B / I
|
J / L and Z
|
|
Earnings up to LEL
|
NIL
|
NIL
|
NIL
|
NIL
|
|
Earnings between LEL and PT
|
0%
|
NIL
|
0%
|
0%
|
|
Earnings between PT and UEL
|
10%
|
NIL
|
3.85%
|
2%
|
|
Earnings above UEL
|
2%
|
NIL
|
2%
|
2%
|
So, for payments made on and after 06 January 2024, National Insurance for employees will be calculated as follows:
Band Standard Pensioners Reduced Deferred
Table Letters A / F / H / M and V C / S B / I J / L and Z
Earnings up to LEL NIL NIL NIL NIL
Earnings between LEL and PT 0% NIL 0% 0%
Earnings between PT and UEL 10% NIL 5.85% 2%
Earnings above UEL 2% NIL 2% 2%
There is no reduction in the main percentage that applies to employers.
For Bookkeepers
ICB strongly recommends members contact their software providers to enquire when they will be updating their software. The reduction in the main percentage will be effective for payments made on and after 06 January 2024.
