Autumn Statement 2023: National Insurance

The Chancellor announced the following measures on National Insurance in his 2023 Autumn Statement.

Class 1 (employee NICs)

From 6 January 2024:

• The main rate of employee Class 1 NICs will be reduced by 2%, from 12% to 10%.

From 6 April 2024: 

• The Lower Earnings Limit (LEL) will remain at 2023-24 levels for 2024-25 (£6,396).

Class 2 (self-employed)

From 6 April 2024:

• Compulsory Class 2 NICs will be abolished. Self-employed individuals: 
  • With profits above £12,570 will no longer be required to pay Class 2 NICs, but will continue to receive access to contributory benefits including the state pension. 
  • With profits between £6,725 and £12,570 will continue to receive access to contributory benefits, including the state pension, by way of an NI credit.
  • With profits below £6,725 who choose to make voluntary Class 2 contributions to secure access to contributory benefits can continue to do so.
• The Class 2 voluntary contributions rate will be frozen at its 2023-24 rate of £3.45 per week for 2024-25.
  • The Small Profits Threshold will also be frozen at £6,725. 

Class 3 (voluntary)

From 6 April 2024:

• The Class 3 rate will remain at £17.45 per week for 2024-25.

Class 4 (self-employed)

From 6 April 2024:

• Main rate Class 4 NICs will reduce by 1%, from 9%, to 8%.

See National Insurance: Rates

Extension of NICs relief for hiring veterans

• The employer's NI relief for hiring qualifying veterans is to be extended by one year to April 2025.
• This means that businesses will continue to pay no employer NICs on annual earnings of up to £50,270 for the first year of a qualifying veteran’s employment in a civilian role.

See Employers' NICs relief for veterans

Useful links

Autumn Statement 2023: At a glance
The Chancellor, Jeremy Hunt, presented his Autumn Statement 2023 speech on Wednesday 22 November. This is our 'At a glance' summary of the key tax announcements and measures. 

External links

Policy paper: Changes to National Insurance contributions from 6 January 2024 

Policy paper: Autumn Statement 2023: National Insurance Factsheet