However, given the number of different national insurance rates, and the organisational complexity it creates at HMRC, it is still hoped that one day a chancellor will be bold enough to merge national insurance with income tax to make the system more transparent and easier to operate.
Apprentices
The rates of national insurance for apprentices have moved in line with employees'.
Some apprentices will benefit from the increased minimum apprentice wage from £5.28 an hour to £6.40 an hour.
Pensioners
State pensioners do not pay national insurance and will not benefit from the rate changes, but they weren’t forgotten entirely.
The chancellor confirmed that he will honour his commitment to the triple lock in full.
The new full state pension will therefore increase by 8.5 per cent to £221.20 a week from April 2024 (or £169.50 a week for those who reached state pension age before April 2016).
Don’t be fooled by headlines though – tax liabilities are still increasing.
While these cuts to the national insurance rates will provide some relief to those in work, set against the backdrop of frozen tax thresholds and allowances in a time of high inflation, many will continue to see their overall tax liability increase year on year.
The chancellor has been able to make some headlines by cutting rates of national insurance, but the so-called 'fiscal drag' will mean that UK plc is still feeling the weight of our ever-increasing tax burden.
He may, though, be keeping some pre-election tax cuts up his sleeve for the 2024 Budget.
Sam Dewes is private client partner at HW Fisher
