Does the Autumn Statement Mean More Take Home Pay?
The Autumn Statement was announced on the 22nd of November by Chancellor Jeremy Hunt and it brought along changes to UK national insurance contributions, but crucially there was no mention of income tax cuts that we have come to expect in the year leading to a general election. It’s essential for everyone to understand how these changes may impact their take-home pay and if the Chancellor’s announcement will actually benefit you as business owners and sole traders.
Impact of National Insurance Contribution Changes
The Autumn Statement brought alterations to national insurance contributions, leading to adjustments in take-home pay. On average, individuals can expect to save around £450 annually due to the changes in NI contributions, according to the independent office for budget responsibility. The modifications have implications for the tax burden on self employed individuals and will mean you take home more of your hard earned money.
What are the changes to National Insurance?
Do these NI changes mean more take home pay?
Unchanged Tax Thresholds
The Autumn Statement maintains the freezing of income tax rates and thresholds until the 2027-28 tax year. Tax bands and allowances remain unchanged, including the personal allowance, basic rate, higher rate, and additional rate of income tax. This will increase HMRCs tax revenue due to wage inflation pushing more peoples taxable income into higher bands with what has been dubbed a stealth tax. But aside from a bigger budget for HM Treasury this may result in people having lower real wages as inflation erodes spending power of the higher wages meaning that your real pay may actually decrease over the next few years.
Implications of Untouched Tax Thresholds
Are the changes outlined in the Autumn Statement advantageous for sole traders and business owners?
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