National Insurance Reductions:
Effective from January 6th, 2024, there will be a reduction in Class 1 employee National Insurance contributions (NICs) from 12% to 10%. For someone with a £35,400 salary, this translates to a tax cut of over £450 in 2024-25, benefiting more than 29 million individuals. Self-employed workers will also see changes starting from the same date. Class 4 National Insurance Contributions will decrease from 9% to 8%, and the controversial Class 2 NICs will be abolished. According to government calculations, this will result in a £350 saving for 2024-25 based on an annual income of £28,200.£50m Boost To Apprenticeships
Younger workers under 21 will also experience changes from April next year, with the 18-20 year old rate rising to £8.60, and the 16-17 year old hourly rate increasing to £6.40—an impressive 21.2% increase. Apprentices will also benefit from a similar 21.2% increase, bringing their hourly rate to £6.40.
“No economy can prosper without investing in the potential of its people,” Hunt said, adding that the government would use the statement to focus on “skills”.
He announced that the government will introduce £50m in funding over the next two years to boost the levels of apprenticeships in engineering and “other key growth areas” in the UK.
National Living Wage Expanded To Younger Workers
Individuals working for organisations that are members of the Living Wage Foundation will receive an hourly rate of £12.00, regardless of age, and £13.15 for those in London—a testament to the commitment to paying workers the Real Living Wage based on the cost of living.Improve Flexibility To Pensions
For those approaching retirement age, the state pension will see an 8.4% increase in April, aligning it with average earnings while maintaining the Triple Lock. For those approaching retirement age, the state pension will see an 8.4% increase in April, aligning it with average earnings while maintaining the Triple Lock. What it means for businesses: For businesses, the Chancellor also announced that the existing tax break organisations can use to purchase new machinery and equipment will become permanent.
This move aims to stimulate innovation and investment by allowing businesses to fully expense equipment, including computers, large construction equipment, tools, vans, and practical equipment like desks and chairs. Moreover, £4.5 billion in funding was allocated to manufacturing sectors such as green energy, life sciences, aerospace, and zero-emission vehicles.