National Insurance rate again is the key point affecting many small business owners and self-employed. Key changes are:
Class 2 NIC is abolished. It is £3.45 per week flat rate currently for any self-employed operating as a sole trader who makes more than £12,570 in profit annually. This takes effect from next tax year.
Class 4 NIC is reduced from 9% to 8% for profit between £12,570 and £50,270. NIC rate for profit above £50,270 is unchanged at 2%. This takes effect from next tax year.
Class 1 NIC for employees is cut from 12% to 10% for income between £12,570 and £50,270. Employees in higher rate bracket should see an increase in net pay of more than £50 per month. This takes effect on 6 January 2024, earlier than for the Self-Employed.
For Self-Employed people with profit between £6,725 and £12,570, they will continue to get NIC credit, this counts towards the NIC record in future state pension calculation.