Chancellor Kwasi Kwarteng has scrapped a £13 billion-a-year national insurance hike on the eve of his mini-Budget.
The Treasury said the move will affect Brits' wages from November 6, with 28 million keeping an extra £330 next year on average.
But experts have already warned the move will disproporatinately benefit the richest households, with the poorest tenth recieving just £7.66 a year.
The Resolution Foundation said cutting national insurance is a "flawed way to tackle Britian's cost-of-living crisis that is hitting lower-income households the hardest".
Unveiling his mini-Budget on Friday the new Chancellor will outline his vision for a "new era of Britain" - after 12 years of Tory rule.
In the biggest tax cutting event since 1988, Mr Kwarteng is expected to ditch the planned hike in corporation tax from 19% to 25% in 2023.
He will announce the government is in discussion with 38 local authorities in England to set up low-tax "investment zones".
The Chancellor is also set to scrap the cap on bankers' bonuses that came into force in 2014 in response to the financial crash.
In the Commons, Mr Kwarteng will tell MPs: "We will be bold and unashamed in pursuing growth - even where that means taking difficult decisions."
In total he will outline 30 measures, including revealing the cost of the government's energy support scheme, which is expected to exceed £100 billion.
The director of the Institute for Fiscal Studies Paul Johnson said the the statement wil be the "biggest tax-cutting fiscal event since Nigel Lawson's Budget of 1998".
The Trade Union Congress also warned the "fiscal event" will be an "acid test" for the new government.
General secretary Frances O'Grady said: "Are ministers on the side of working people, or more interested in handing out bungs to big business and City bankers?
"Tax cuts will do nothing to jumpstart the economy and will only line the pockets of the wealthy and companies like Amazon.
"When millions are struggling to make ends meet, the Chancellor should focus on getting wages rising across the economy - not helping out corporations.
Labour's shadow cheif secretary to the Treasury Pat McFadden said: "This is just the latest twist and turn in 12 years of low growth and plummeting living standards.
“The Conservatives don't have a new plan for economic growth. They have simply moved from levelling up to trickle down and that has not worked in the past."
He added: “The whole pattern of changing Tory leaders every two years and pretending it’s a new beginning has created instability and chaos.
"What Britain needs right now is a government that can give certainty to businesses, make our economy secure and get it growing. The Tories can’t offer that.”
The Liberal Democrats are also demanding ministers scrap the entire conference recess to allow proper scrutiny of the mini-Budget.
