News
Total Income Tax and NI income hits new high
22 July 2024
HM Treasury has taken £77.2 billion in Income Tax and National Insurance (NI) since April 2024 – signalling the effect of the freeze in the Personal Allowance and Income Tax bands and thresholds.
Taxpayers have seen two landmark cuts to employee NI payments, falling from 12 per cent to 10 per cent after the 2023 Autumn Statement, before decreasing again to eight per cent following the Spring Budget.
As a result, the amount of NI taken by the Treasury in the period between April and July 2024 has decreased by £1.3 billion compared to the same period last year.
Rising wages
The rise in total personal tax take has therefore arisen due to rising wages, both as a response to the cost-of-living crisis in 2023 and a result of a rise in the National Living Wage (NLW) – increasing to £11.44 per hour and extended to 21- and 22-year-olds for the first time.
More Income Tax is being paid as those in the lowest band, earning between £12,571 and £50,270, earn more with a higher NLW.
Part-time workers have also been pulled into the band by exceeding their Personal Allowance of £12,570.
Staying prepared
The coming years are likely to illustrate the importance of tax planning, particularly within the realms of tax reliefs and allowable expenses for the self-employed.
Contact our team for further advice on managing tax liabilities and changes in tax legislation.
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