Budget 2024: See whether you win or lose from tax and national insurance tweaks

Published

2 years ago

March 6, 2024

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National insurance has been cut by a further 2p, so workers will pay 8% of their earnings between £12,570 and £50,270, instead of the 12% it was before Autumn.

But tax thresholds – the amount you are allowed to earn before you start paying tax (and national insurance) and before you start paying the higher rate of tax – will remain frozen.

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This means people end up paying more tax than they otherwise would, when their pay rises with inflation but the thresholds don’t keep up. That phenomenon is known as “fiscal drag” and it’s often called a “stealth tax” because it’s not as noticeable immediately in your pay packet.

Enter your salary to the nearest £1,000 in our calculator to see how much better or worse off you are overall, once they balance out against one another.

That low threshold of £12,570 has been in place since April 2021. The Office for Budget Responsibility say that if it had increased with inflation as normal it would be set at £15,220 for 2024/25.

Workers would earn an extra £2,650 tax free each year in that case.

The higher threshold would be more than £61,000, meaning someone on a £60,000 salary would be paying the 40% income tax rate on almost £10,000 more of their earnings.

That would cost an extra £2,000 over the course of a year, more than offsetting the gains from cuts to national insurance.

Overall, workers are better off if they earn between £32,000 and £55,000, or more than £131,000, but everyone else will be paying more in 2024/25 than they would have done if the government had raised the tax thresholds as normal.

Someone on a £50,000 salary is best off, by £752 a year – not far off what the average package holiday to Europe cost in 2023.

That’s because they benefit from the maximum amount of lower national insurance before falling into the high tax bracket.

But someone on £16,000 a year will pay £607 more in total – equivalent to more than three months of average household spending on food.

Their income level means national insurance savings are limited but they are paying 20% in income tax on an additional £2,650 of earnings.

The calculations don’t account for any more complex tax deductions or credits for different groups of people, for example student loans, pensions or childcare.

But separate Sky News data analysis shows how young graduates now take home £1,200 less on average each month than they did before the pandemic after adjusting for inflation.

Methodology

Sky News has taken figures for what the new thresholds from 6 April 2024 would have been if they had increased with inflation from the Office for Budget Responsbility.

To work out how much less national insurance people will pay in 2024/25, we have worked out how much you would have paid on the 12% rate with the current thresholds, and how much you will pay on the 8% rate. This value will always be positive if you earn more than £12,570.

To work out how much fiscal drag has cost you, we have applied the new thresholds from ICAEW to the lower 20% rate of tax, the higher 40% rate, and the highest 45% rate. We have also assumed that the taper, when you start losing your personal allowance, starts at £100,000 and you lose £1 for each additional £2 earned, as it was before. This value will always be negative if you earn more than £12,570.

We ran the workings for these calculations by the Chartered Institute of Taxation who corroborated our findings.

To work out the difference we have taken the fiscal drag figure away from the national insurance figure. If it’s a positive number you are taking home more pay, but if it’s negative you are taking home less pay.

That means that the fiscal drag savings assume that national insurance is 8% rather than the 12% it was before. If national insurance had stayed at 12%, the effect of fiscal drag would have been even greater for lower earners.

The Data and Forensics team is a multi-skilled unit dedicated to providing transparent journalism from Sky News. We gather, analyse and visualise data to tell data-driven stories. We combine traditional reporting skills with advanced analysis of satellite images, social media and other open-source information. Through multimedia storytelling, we aim to better explain the world while also showing how our journalism is done.

Business

Burger King UK lands new backing from buyout firm Bridgepoint

Published

6 hours ago

December 11, 2025

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Burger King UK lands new backing from buyout firm Bridgepoint

The private equity backer of Burger King UK has injected millions of pounds of new funding as part of a deal which paves the way for their partnership to be extended into the 2040s.

Sky News understands that Bridgepoint has invested a further £15m into the fast food giant in recent days, with a further sum – thought to be up to £20m – to be deployed over the next 18 months.

The new funding has been committed as Burger King UK’s Master Franchise Agreement with a subsidiary of Restaurant Brands International has been extended to 2044 in a deal which is said to align the interests of its various financial stakeholders more closely.

Burger King’s British operations comprise roughly 575 outlets, and employ approximately 12,000 people.

In results released this week, Burger King UK said it had delivered a “solid performance…amid sector headwinds” in 2024.

Revenue increased by 7% to £408.3m, with underlying earnings before interest, tax, depreciation and amortisation up 12% to £26m.

The company also said it had completed a refinancing process, with the maturity of its bank facilities pushed out to March 2028.

Under the leadership of Alasdair Murdoch, its long-serving chief executive, Burger King plans to open roughly 30 new sites next year.

It comes at a challenging time for the UK hospitality sector, with casual dining chains TGI Fridays and Leon both filing to appoint administrators in the last few days.

Industry bosses say that last month’s Budget has piled fresh cost pressures on them.

Bridgepoint declined to comment on the injection of new capital into Burger King UK.

Business

Hundreds of jobs at risk as LEON moves to cut unprofitable restaurants

Published

1 day ago

December 10, 2025

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Hundreds of jobs at risk as LEON moves to cut unprofitable restaurants

The fast food chain LEON has taken a swipe at “unsustainable taxes” while moving to secure its future through the appointment of an administrator, leaving hundreds of jobs at risk.

The loss-making company, bought back from Asda by its co-founder John Vincent in October, said it had begun a process that aimed to bring forward the closure of unprofitable sites. It was to form part of a turnaround plan to restore the brand to its roots around natural foods.

It was unclear at this stage how many of its 71 restaurants – 44 of them directly owned – and approximately 1,100 staff would be affected by the plans for the so-called Company Voluntary Arrangement (CVA).

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“The restructuring will involve the closure of several of LEON’s restaurants and a number of job losses”, a statement said.

“The company has created a programme to support anyone made redundant.”

It added: “LEON and Quantuma intend to spend the next few weeks discussing the plans with its landlords and laying out options for the future of the Company.

“LEON then plans to emerge from administration as a leaner business that can return to its founding values and principles more easily.

“In the meantime, all the group’s restaurants remain open, serving customers as usual. The LEON grocery business will not be affected in any way by the CVA.”

Mr Vincent said. “If you look at the performance of LEON’s peers, you will see that everyone is facing challenges – companies are reporting significant losses due to working patterns and increasingly unsustainable taxes.”

Mr Vincent sold the chain to Asda in 2021 for £100m but it struggled, like rivals, to make headway after the pandemic and cost of living crisis that followed the public health emergency.

The hospitality sector has taken aim at the chancellor’s business rates adjustments alongside heightened employer national insurance contributions and minimum wage levels, accusing the government of placing jobs and businesses in further peril.

Business

Revenues of water company to be cut by regulator Ofwat

Published

1 day ago

December 10, 2025

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Revenues of water company to be cut by regulator Ofwat

The UK’s biggest water supplier has been dealt another blow as the regulator decided to reduce its income.

Thames Water, which supplies 16 million people in England, has been told by the watchdog Ofwat its revenues will be cut by more than £187m.

It comes as the utility struggles under a £17.6bn debt pile and the government has lined up insolvency practitioners for its potential collapse.

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Overall, water firms face a sector-wide revenue reduction of nearly £309m as a result of Ofwat’s determination. Thames Water’s £187.1m cut is the largest revenue reduction.

This will take effect from next year and up to 2030 as part of water companies’ regulator-approved five-year spending and investment plans.

The downward revenue revision has been made as Ofwat believes the companies will perform better than first thought and therefore require less money.

Better financial performance is ultimately good news for customers.

The change published on Wednesday is a technical update; the initial revenue projections published in December 2024 were based on projected financial performance but after financial results were published in the summer and Ofwat was able to apply these figures.