National Insurance cuts in the Autumn Statement

The Chancellor’s Autumn Statement contains reductions to National Insurance but was light on changes directly impacting share schemes or employee incentives.

National Insurance cuts

The main Class 1 rate of National Insurance for employees will be cut from 12% to 10%. Unusually, the Government is bringing this change in quickly from 6^th January 2024.

This means that the combined rate of income tax and National Insurance for basic rate tax payers will be reduced from 32% to 30%.

There are no changes to the employer’s National Insurance rate of 13.8%.

In addition, class 4 National Insurance for the self employed will reduce from 9% to 8% with effect from 6^th April 2024.

EMI

As mentioned in our previous blog the Government has now confirmed the welcome measure to extend the deadline for notifying the grant of EMI options.

Currently EMI options need to be notified to HMRC within 92 days of grant. From April 2024 this will be replaced by a requirement to file the notice by 6^th July following the end of the tax year in which the grant was made.

In practice, this will mean that new grants made within the tax year will be filed at the same time as employer’s file their EMI annual returns.

Employment Ownership Trust & Employee Benefit Trust Consultation update

As mentioned in our previous blog on the Government consultation on EOTs and EBTs, ended on 25^th September.

We are aware that many law firms, accountancy practices and industry bodies made detailed responses to this consultation.

The Government had previously stated that would announce their response to this ‘later this year’ however, there was no mention of this in the Autumn Statement. So we’ll update you on this as soon as something gets announced.