Chancellor Jeremy Hunt confirmed a 2p cut in National Insurance (NI) in the Budget today (6 March), worth around £450 a year for someone on an average salary.
The cut, widely trailed in advance of the Budget and applying from 6 April, will cost the Treasury approximately £10bn a year.
According to advance figures from Evelyn Partners, those earning £20,000 will save £149 a year; those earning £30,000 will save £349 a year; and those earning £40,000 will save £549 a year.
Higher and additional rate taxpayers, meanwhile, would save £754 a year.
Following the announcement, Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “National Insurance is only one part of a wider tax picture, which is growing gloomier.
“This April we’ll see another freeze in the personal allowance and the higher rate tax threshold, which the OBR says will see 1.1 million more people dragged into paying income tax and 800,000 more forced to pay higher rate tax.
“It means we can’t look at a National Insurance saving in isolation. We’re still locked into a freeze that means over time we’re going to see our tax bills continue to rise. And because more of the benefit of cuts goes to higher earners, those on lower earnings will suffer particularly.
“When you factor in both the National Insurance cut and the tax threshold freezes, those earning less than £19,000 will actually be worse off.”
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