4 Autumn Budget | 30 October 2024 Personal taxation Income tax The personal allowance for 2025/26 will remain at £12,570 and the higher rate threshold will stay at £50,270. The freeze on both will end from April 2028, when indexation will resume. Savings rate band The 0% band for the starting rate for savings income for 2025/26 will remain at its current level of £5,000. Dividend tax The dividend allowance will remain at £500 for 2025/26 and the rates of tax on dividends will also be unchanged. National insurance contributions (NICs) The class 1 secondary (employer) contribution rate on earnings above the reduced secondary threshold (ST) of £5,000 will be increased from 13.8% to 15.0% from 6 April 2025. The employment allowance will rise from £5,000 to £10,500 for 2025/26 and the £100,000 upper threshold for eligibility will be removed. Employer NICs relief for hiring qualifying veterans will be extended to 5 April 2026. The ST will be reduced to £5,000 from 6 April 2025 until 5 April 2028 and be index-linked in line with CPI thereafter. The upper earnings limit, upper secondary thresholds and upper profits limit will remain aligned to the unchanged higher rate threshold at £50,270 for 2025/26. Similarly, the class 1 primary threshold of £12,570 will remain unchanged. For 2025/26, the lower earnings limit will increase to £6,500 and the small profits threshold (SPT) will rise to £6,845. The upper earnings limit and class 4 upper profits limit will remain aligned to the higher rate threshold at £50,270 through to April 2028. Class 2 contributions are no longer required from the self-employed, but those with profits below the SPT who wish to retain access to contributory benefits (e.g. state pension) have the option to make voluntary contributions at an increased rate of £3.50 a week for 2025/26. The voluntary class 3 rate will rise to £17.75 a week for 2025/26. Saver Don’t lose your personal allowance. Your personal allowance of £12,570 is reduced by £1 for every £2 of income between £100,000 and £125,140. You may be able to make a pension contribution or charitable gift to bring your income below £100,000.
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