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As of January 2020, self-employed National Insurance Contributions (NICs) will be categorised as Class 2 when profits are between £6,365 and £8,631.99 a year. If a self-employed worker earns £8,632 or more a year they will be categorised as Class 4. Class 2 contributions are charged at £3.00 per week and are usually paid by direct debit. [18]
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Reduction in the main rate of National Insurance from 12% to 10% from 6 January 2024. [19] Reduction in Class 4 National Insurance for self employed from 9% to 8% from April 2024. [19] Increase in the National Living Wage from £10.42 to £11.44 per hour from April 2024. The age threshold for the increase will also be lowered from 23 to 21.
The second largest source of government revenue is National Insurance contributions (NICs). NICs are payable by employees, employers and the self-employed and in the 2010–2011 tax year £96.5 billion was raised, 21.5 per cent of the total collected by HMRC. [69]
Jeremy Hunt said the 2p national insurance reduction will mean the ‘lowest effective personal tax rate’ for almost 50 years. Personal taxes cut to lowest level since 1975, but gains offset by ...
The Opposition party said that, even with a national insurance cut coming into force on January 6, families in Britain were still likely to be £1,200 a year worse off under Tory taxation plans.
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