Impact assessment

National Insurance contributions (NICs) changes from Autumn Statement 2023 and Spring Budget 2024 – Screening equality impact assessment

Published 8 April 2024

Project objectives

This impact assessment is in relation to the operational delivery of changes to National Insurance rates announced at the Autumn Statement 2023 and Spring Budget 2024.

At the Autumn Statement 2023 the government announced a reduction in the main rate of employee Class 1 National Insurance contributions by 2 percentage points, from 12% to 10% from 6 January 2024.

For the self-employed it reduced the main rate of Class 4 National Insurance contributions by one percentage point, from 9% to 8%, and removed liability to pay the weekly Class 2 flat rate for those with profits above £12,570 from 6 April 2024, while ensuring they will retain access to contributory benefits including the State Pension (as is currently the case).

Those with profits under £6,725, who pay Class 2 National Insurance contributions voluntarily, will also retain access to contributory benefits including the State Pension.

At the March 2024 Budget the Government announced the main rate of employee Class 1 National Insurance contributions would be further reduced by an additional two percentage points – from 10% to 8% from 6 April 2024.

For the self-employed it also announced the main rate of Class 4 National Insurance contributions will be reduced by a further 2 percentage points, meaning the rate will be 6% from 6 April 2024.

Customer groups affected

The rate changes are expected to affect 1.6 million employers, 70,000 agents, 27 million employees and 2.2 million individuals in Self Assessment.

What customers will need to do

Employers are required to update their payroll software to ensure that employees pay the correct amount of Class 1 National Insurance contributions from 6 January and 6 April 2024. If, for any reason, they are unable to make the necessary amendments, it is expected that they make subsequent payroll corrections. This is a business-as-usual process, supporting guidance is available on GOV.UK.

Customer experience will not change for the self-employed, as the correct rate will be applied as part of their normal Self Assessment calculation at the end of the tax year.

Assessing the impact

Before the scheme started, we assessed the equality impacts on all the protected characteristic groups in line with the Equality Act and Public Sector Equality Duty and section 75 of the Northern Ireland Act:

• racial groups
• sex
• gender reassignment
• sexual orientation
• religion or belief
• pregnancy and maternity
• marriage and civil partnership
• people with dependents and those without
• political opinion (for Northern Ireland only)

There is no evidence to suggest any specific impacts on those customers within any of the protected characteristic groups (listed above).

The following equality impacts were identified:

Disabled

Impact on customers

Some customers may have difficulty engaging with HMRC services due to their disability.

Proposed mitigation

Guidance published on GOV.UK complies with Government Digital Service (GDS) standards and GOV.UK style guides. HMRC offers Extra Support services which can be accessed by those customers who cannot, for whatever reason, interact with HMRC digitally or who need additional support and reassurance.

Digital content can also be provided in a variety of formats, including hard copy, on request. Formats available include: Braille, Audio, Large Print. There is also a zoom facility to increase and reduce font sizes within online content.

Customers also have the option of appointing someone else to deal with HMRC on their behalf, such as an agent.

Age

Impact on customers

Insight suggests varying levels of digital capability and confidence across differing age groups. Some customers may be less confident using HMRC digital services than others based on their age group. We expect those customers are more likely to need to contact HMRC for further support.

Proposed mitigation

HMRC offers the Extra Support service which can be accessed by those customers who cannot, for whatever reason, interact with HMRC digitally or who need additional support and reassurance.

Customers also have the option of appointing someone else to deal with HMRC on their behalf, such as an agent.

People who use different languages (Including Welsh language and British Sign language)

Impact on customer

There may be some impacts for customers whose first languages are not English or Welsh.

Proposed mitigation

HMRC offers a Welsh language service to customers, where proportionate, in line with HMRC protocol. Forms on GOV.UK can be requested in Welsh.

For any customers whose first language is not English, alternative arrangements can be made for friends and family to interpret or speak on a customer’s behalf. HMRC staff can access interpretation service via ‘Big Word’ to support customers.

British Sign Language services can be provided via the Extra Support Services available to customers.

Opportunities to promote equalities

We have considered opportunities to promote equalities and good relations between people in each of the protected characteristic groups and those outside of that group,

None have been identified.

A full Equality Impact Assessment is not recommended.