Chancellor Kwasi Kwarteng confirmed the national insurance increase which came into effect in April will be reversed from November 6. Ahead of his mini-budget on Friday, he said: “Taxing our way to prosperity has never worked. To raise living standards for all, we need to be unapologetic about growing our economy.
“Cutting tax is crucial to this – and whether businesses reinvest freed-up cash into new machinery, lower prices on shop floors or increased staff wages, the reversal of the levy will help them grow, whilst also allowing the British public to keep more of what they earn.”
The 1.25 percentage point increase in national insurance was announced by former chancellor Rishi Sunak to help fund health and social care.
Mr Kwarteng added that the plan to reverse the rise in national insurance was a “tax cut for workers”.
In a tweet that appears to pre-empt Friday’s mini-budget, he said: “I can confirm that this year’s 1.25% point rise in National Insurance will be reversed on 6th November.
“Its replacement – the Health and Social Care Levy planned for April 23 – will be cancelled.
“A tax cut for workers. More cash for businesses to invest, employ and grow,” he said.
The Government is to publish a bill cancelling the hike in national insurance contributions to pay for social care and dealing with the NHS backlog, Downing Street has said. A No 10 spokeswoman said the Health and Social Care Levy (Repeal) Bill was part of the Government’s commitment to “a low tax, high growth” economy.
“This is delivering on a commitment the PM made on the (Tory leadership) campaign trail,” the spokeswoman said.
The move comes ahead of Chancellor Kwasi Kwarteng’s “fiscal event” on Friday when he will set out more details of the Government’s plans to cut taxes, including scrapping a planned rise in corporation tax.
