In the Spring Budget 2023, there were updates to National Insurance contributions, wages and changes to tax benefits on cars and vans. This article summarises the changes that you need to know as an employer.
National Insurance Contributions (NICs)
A similar principle to that outlined above for income tax thresholds will be followed in respect of many of the NICs thresholds, namely that they are frozen at the limits for the preceding year and will remain at those levels until 2028. Full details are laid out at the end of this publication.
However, the government will uprate the Class 2 and Class 3 NICs rates for 2023/24 to £3.45 per week and £17.45, respectively. National Living Wage (NLW) and National Minimum Wage (NMW)
The government will increase the hourly NLW and NMW from 1 April 2023 as follows:
- £10.42 for those 23 years old and over
- £10.18 for 21–22-year-olds
- £7.49 for 18–20-year-olds
- £5.28 for 16–17-year-olds
- £5.28 apprentice rate for apprentices under 19 and those 19 and over in their first year of apprenticeship.
Taxable benefits for company cars for 2023/24
The rates of tax for company cars remain frozen until 2024/25. Future car benefit rates have been announced for 2025/26 to 2027/28:
- For 2025/26, the rates for emissions under 75gm/km increase by 1%.
- For 2026/27, the rates for emissions under 75gm/km increase by a further 1%.
- For 2027/28, the rates for emissions under 75gm/km increase by a further 1%.
Electric car charges will rise from 2% to 5% over that period.
For cars with emissions of 75gm/km and above, there will be only a 1% rise in 2025/26, subject to a maximum of 37%.
From 6 April 2023, the figure used as the basis for calculating the benefit for employees who receive free private fuel from their employers for company cars is increased to £27,800.
Company vans
For 2023/24, the benefit increases to £3,960 per van and the van fuel benefit charge where fuel is provided for private use increases to £757. If a van cannot, in any circumstances, emit CO2 by being driven, the cash equivalent is nil.
If you have any questions relating to the updates given in this blog please get in touch with us by calling 01623 490 120 or by emailing