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National Insurance Contributions (Reduction in Rates) Act 2024

Contents

Commentary on provisions of Act

Section 1: Reduction in rates

  1. Section 1(1)(a) amends section 8(2)(a) SSCBA 1992 to reduce the main primary percentage of Class 1 NICs paid by employees from 10% to 8%. Section 1(1)(b) makes equivalent provisions for Northern Ireland by amending SSCB(NI)A 1992.
  2. Section 1(3)(a) amends section 15(3ZA)(a) SSCBA 1992 to reduce the main Class 4 percentage paid by the self-employed to 6%. Section 1(3)(b) makes equivalent provisions for Northern Ireland by amending SSCB(NI)A 1992.
  3. Section 1(2) reduces the reduced rate that applies in relation to a historic class of married women and widows.
  4. Section 1(4) provides that section 2 of the National Insurance Contributions (Reduction in Rates) Act 2023 is superseded by section 1(3) and accordingly is to be treated as never having had effect. The current main Class 4 percentage is 9%. Section 2 of the National Insurance Contributions (Reduction in Rates) Act 2023 would have set the Class 4 NIC rate at 8% for the start of the 2024-25 tax year (if that section had not been superseded by section 1(3) of this Act).
  5. The amendments made by Section 1 take effect from 6 April 2024.

Section 2: Annual maximum contributions

  1. Section 2 amends S.I. 2001/1004. Section 2 amends the calculation of the annual maximum for the start of the 2024-25 tax year, as set out in regulations 21 and 100 of S.I. 2001/1004 to reflect the reduced main rates of primary Class 1 NICs and Class 4 NICs.
  2. Section 2(4) provides that paragraph 3 of the Schedule to the National Insurance Contributions (Reduction in Rates) Act 2023 is superseded by this section and accordingly is to be treated as never having had effect. Paragraph 3 of the National Insurance Contributions (Reduction in Rates) Act 2023 would have set the annual maximum specified in regulations 21 and 100 of S.I. 2001/1004 for the start of the 2024-25 tax year based on the rate reductions in that Act.

Section 3: Commencement and short title

  1. Section 3(1) provides that the Act comes into force on 6 April 2024.
  2. Section 3(2) gives the short title of the Act as the National Insurance Contributions (Reduction in Rates) Act 2024.

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