Fri, 10 Oct 2025

Fri, 10 Oct 2025 What are National Insurance and income tax and what could change in the Budget?

Some experts think the government may break its promise not to increase income tax, NI or VAT for working people.
National Insurance (NI)
* NI rate starts at 8% for employees earning over £242 a week or self-employed with profits over £12,570
* Self-employed pay 6% on earnings between £12,570 and £50,270
* Employers pay 15% on most employees' wages above £5,000 (previously £9,100) Income Tax
* Basic rate of 20% for annual earnings between £12,571 and £50,270
* Higher rate of 40% for earnings between £50,271 and £125,140
* Additional rate of 45% on all earnings above £125,140 Changes to Income Thresholds
* Current freeze means more people start paying tax and NI as wages increase
* Average earner would have a tax cut of about £340 in 2024-25, but only £140 by 2027 Proposed Changes to Budget
* Chancellor Rachel Reeves may extend the current freeze on income thresholds or make changes to National Insurance rates
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