Impact of NIC cuts following the Spring Budget 2024 – IFA Magazine

The headline change was the Chancellor’s 2% cut in National Insurance Contributions (NICs), although the decision had already garnered significant attention due to prior reports and leaks. Given that there was already a cut announced to NICs in the Autumn Statement 2023, the additional announcement was an interesting move.

According to the Government, building on changes made at the Autumn Statement, it has cut taxes again for 29 million
people, with the average worker on £35,400 receiving a cut in 2024/25 of over £900.

Katharine says: “The further 2p cut to National Insurance will be welcomed as a less expensive alternative to cutting income tax that still offers those in work a meaningful saving. However, Income Tax thresholds remain frozen, reducing the real impact of the national insurance cuts.”

There were also significant changes to the non-domiciled tax regime. Given what’s been announced, the proposed changes would be attractive to individuals looking for a low tax jurisdiction because they will not pay tax on income for their first four years in the UK. However, Katharine notes: “The introduction of a new residence-based relief for new arrivals to the UK from April 2025, with no UK tax on overseas income gains for the first four years, should simplify the regime but significantly reduces the timeframe over which individuals will benefit.”

You can read Katharine’s comments in full via IFA Magazine.

What these changes mean for you

You can read our full summary of the Spring Budget 2024 here. If you would like further advice, contact Katharine or a member of our Private Client team.