Autumn Statement

Find out how the announcements affect payroll

National Insurance changes

Employees

The main change which has been announced by the Chancellor is the reduction of Class 1 employee NICs from 12% to 10% from 6 January 2024.

This means employees will benefit from retaining an extra 2p for every £1 they earn from the beginning of the calendar year.

The Lower Earnings Limit (LEL) is going to remain the same for the 2024 to 2025 tax year so there are no changes there to impact an individuals access to NICs credits.

NIC relief

Included in the statement was the announcement that the NICs relief for employers who hire former members of the UK regular armed forces will be continued into the 2024 to 2025 tax year so there's no change.

The Investment Zones programme will be extended from 5 years to 10 years meaning the extension of the zero-secondary rate of employer NICs for employees earnings above the secondary threshold.

The Freeport tax relief currently applied to English Freeport employers will continue to be available until September 2031 so have also been extended from 5 years to 10 years.

Self-employed

There are also changes for those who are self-employed who will no longer be required to pay Class 2 NICs on profits above £12,570 from the 6 April 2024.

The rates for Class 2 and Class 3 NICs will remain at the current rate for 2024 to 2025 but the Class 4 NICs will be reduced to 8% from 6 April 2024.

National Minimum Wage & National Living Wage

The key point to note on the National Minimum Wage and National Living Wage is the abolition of the 21 to 22 year-old category of worker meaning the final bracket is the 21 and over category.

This change and the uplift outlined in the table below will take effect from 1 April 2024.

Category of worker	Rate effective 1 April 2024	Increase
Apprentices	£6.40	£1.12
NMW 16-17	£6.40	£1.12
NMW 18-20	£8.60	£1.11
NMW 21+	£11.44	£1.02
Accommodation offset	£9.99	£0.89

PAYE 2024-25

PAYE Personal Allowance
£12,570

PAYE Thresholds
Weekly: £242
Monthly: £1,048

Standard tax code
1257L

Emergency tax codes
1257 W1
1257 M1
1257 X

Tax Code uplifts
L: N/A*
M: N/A*
N: N/A *

*due to no change in the Personal Allowance

Income Tax Rates – England & Northern Ireland

Basic rate 20% 1 – 37,700
Higher rate 40% 37,701 – 125,140
Additional rate 45% 125,141 ≥

Income Tax Rates – Scotland

Starter rate 19% 1 – 2,162
Basic rate 20% 2,163 – 13,118
Intermediate rate 21% 13,119 – 31,092
Higher rate 42% 31,093 – 125,140
Top rate 47% 125,141 ≥

Income Tax Rates – Wales

Basic rate 20% 1 – 37,700
Higher rate 40% 37,701 – 125,140
Additional rate 45% 125,141 ≥

Pensions

In the Autumn Statement it was announced that the government will keep the triple lock pension and use the inflationary measure to uprate the state pension by 8.5% in April 2024.

The inflationary measure was used as this was the highest of the three values it is locked in against and was referencing the September rate of inflation.

The Chancellor also announced there would be a call for evidence to investigate the ‘small pot’ pension issue and the lifetime provider model.

This model looks at allowing an employee to request that contributions are paid into their existing pension scheme when they move to a new employer, so they have one pot rather than multiple small pots.

More will be known about this once the government publish the call for evidence.