Following the Autumn Statement announcement n the 2 percentage reduction in employee National Insurance contributions, the HMRC Software Developers Support Team (SDSTeam) have issued the following.
Dear Developer
On 22 November, the Government announced changes to National Insurance contributions (NICs) rates for the current tax year. Please note that these changes are subject to Parliamentary approval.
Key measures of the Government announcement, which will impact payroll software, include:
- A change to the main rate of Primary (Employee) Class 1 NICs for earnings paid on or after 6 January 2024 and for the remainder of the 2023-24 tax year.
- A revised annualised Primary Class 1 NICs rate for Directors to reflect the in-year change.
- No change to Secondary (Employers) Class 1 NICs.
- No change to Class 1A NICs.
- We realise the timeline for this is tight and it is possible that some employers will not be able to deduct the correct NICs rates from 6 January. HMRC will be directing employees to their employers to correct any overpaid NICs in the first instance.
Please find attached an updated EB5 document showing the NICs calculations to apply from 6 January 2024, along with a table of the Class 1 rates and thresholds. The updated EB5 (NI Guidance for Software Developers) and updated payroll helpbooks will be published on GOV.UK in due course. We will also be providing payroll test data examples shortly.
PAYadvice.UK 22/11/2023