Employment tax update - May 2024

HMRC have released their April Agent Update (Issue 119).

This month the content most relevant to employment taxes and reward activities is limited to an update on NICs, however we have included further commentary on areas of interest relating to employment tax and reward.

National Insurance Contributions (NICs) tool and rate change reminder

  • HMRC have launched an online tool where individuals can estimate how the April 2024 NIC changes will affect them.
  • The most recent rate change for Class 1 NIC took effect on 6 April 2024 with a reduction from 10% to 8% for the primary NIC rate up to a threshold of £50,270.
  • The rate change for Class 4 NICs (for self-employed individuals) also took effect on 6 April 2024, with a reduction in the rate up to the upper profits limit being reduced to 6%.
  • As mentioned in previous editions of this employment tax update, the marginal NIC rate remains at 2% for both Class 1 and Class 4 NICs.

HMRC official rate of interest for 2024/25

  • HMRC have maintained the HMRC Official Rate of Interest (ORI) at 2.25%. For reference, the ORI is used when calculating Benefit in Kind charges on employment related beneficial loans.

Upcoming UK employment tax deadlines

Non-dom reform

Outside of HMRC’s agent update but still in relation to wider employment tax and reward activities, our private client team have recently published a series of articles regarding the UK non-dom reforms announced in the Government’s Spring budget. The series includes an analysis of the proposed reforms and of the Labour Party’s response.

Further to the articles about the UK non-dom reforms, our tax litigation team have also published an article on the Labour Party’s plan to close the tax gap by providing additional funding to HMRC and by making legal and regulatory changes. Should the Labour Party win the next general election, such changes are likely to impact employment tax and reward.

Read the full April Agent Update (Issue 119).

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