“Accountants have been given a Christmas to-do list by the Chancellor today with urgent legislation to change National Insurance charges by January. NICs for employees are dropping from 12% to 10% - after rising as high as 13.25% last year and then being dropped back down - and this change is being implemented by urgent legislation out of cycle, to come into effect from January 6. This was quite a shift - not so long ago it seemed the Government was not going to implement any cuts. A 2% cut is higher than expected and will come into force sooner than expected. The self-employed are also getting a cut to their NICs after the Chancellor announced that the Class 2 National Insurance has now been abolished, which should save the average self-employed person £192 a year.”
“Implementing these changes out of cycle will make for a busy December for accountants, who might also be looking to sort out Christmas bonus payments and other end-of-year activities.”
“Accountants and payroll staff will need to implement these rate changes, make sure they can handle and advise on full expensing for later in the year, and get ready to implement boosts to the National Minimum Wage and Living Wage - including the change in the age requirement for the Living Wage.”
“Good cloud-based software should make implementing this to-do list very straight-forward. But some care is still necessary - particularly for employees with large salary sacrifice outgoings, as these can cause them to dip below the minimum wage.”
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