UK Business, Finance and Government Update

In November 2024, the Chancellor of the Exchequer, Rachel Reeves announced changes to Secondary Class 1 National Insurance contributions (SC1-NICs) for employers within the UK. We outline those changes, how they have affected the UK economy over the last few months, and how we expect the economy to react going into April 2025 and beyond. Secondary Class 1 NICs are paid by employers for each employee that hits a minimum earnings threshold at each payroll. This is known as the secondary threshold. NIC rate changes In the tax year leading up to April 2025, the following conditions applied for SC1-NICs: Employment Allowance is up-to 5000 for eligible employers* Secondary threshold is 175pw / 758pm / 9,100pa Rate of secondary Class 1 NICs is 13.8% * Eligibility for Employment Allowance: employer's Class 1 NI liabilities were less than 100,000 in the previous tax year. Variations apply where part of a group or multi-payroll. From April 2025, the following conditions will apply: Employmen...