The cancellation of the 1.25 percentage point rise in National Insurance came into effect on November 6. When announcing the reversal, the Treasury said most workers will receive a cut to their National Insurance Contribution directly via their employer’s payroll in their November pay, although some may be delayed to December or January.
The rise was introduced by Boris Johnson’s government, with Rishi Sunak as chancellor, in April and reversed by former chancellor Kwasi Kwarteng in his infamous mini-Budget last month. The scrapping is one of few economic policies introduced by Liz Truss and Mr Kwarteng that was not axed by new Chancellor, Jeremy Hunt and has stayed in place with Mr Sunak as Prime Minister.
The levy was devised by Mr Sunak when he was chancellor to pay for social care and deal with the NHS backlog. It was expected to raise around £13 billion a year to fund social care and deal with the NHS backlog which has built up due to the Covid pandemic.
Rachael Griffin, a tax and financial planning expert at Quilter, recently said: "Employees will still benefit from Kwasi Kwarteng's abolition of the 1.25 percentage point increase to National Insurance which new Chancellor Jeremy Hunt has kept in place, saving them around £218 next year.
"A higher earner on an annual salary of £100,000 will now pay £377 more in income next tax year, while benefiting by more than £1,000 from Kwarteng's previous National Insurance hike reversal."
Savings on National Insurance
Here are the annual savings people on typical salaries will make due to the cut to National Insurance from November 6, according to calculations from Quilter:
- £20,000 - £92.88
- £30,000 - £217.88
- £40,000 - £342.88
- £50,000 - £467.88
- £60,000 - £592.88
- £70,000 - £717.88
- £80,000 - £842.88
- £90,000 - £967.88
- £100,000 - £1,092.88
Find out more about National Insurance Contribution changes from November 6 on GOV.UK here.
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