From July this year, 30 million people will see their tax bills reduce by £330 a year, the single largest tax cut in a decade, worth £6 billion.
The Government is doing this by increasing the threshold at which National Insurance Contributions (NICs) start to be paid to £12,570. This means everyone can earn £12,570 pa free of tax or National Insurance.
The changes to National Insurance contributions will mean that 70% of workers pay less National Insurance, even after the Health and Social Care Levy. The new thresholds mean that 2 million people will be taken out of paying NICs altogether.
Furthermore, everyone earning less than £35,000 per year will pay less national insurance.
Lucy Allan MP has welcomed these changes, which will see people in Telford keeping more of the money they earn.
Lucy Allan MP said:
It is right that the Government did everything possible to fight the pandemic and support people’s jobs throughout the pandemic.
As we now emerge from the pandemic, the Government must be fiscally responsible and start the task of repaying the billions of pounds spent saving jobs and businesses. It also rightly has to fund the huge NHS backlog that was an inevitable consequence of lockdown.
The changes made to National Insurance contributions will ensure that 70% of workers in Telford will now pay less in National Insurance, even after the new levy. Anyone earning less than £35,000 will be paying less in National Insurance from July 2022. It is vital that Government incentivises work and that means letting people keep more of the money they earn.
Looking ahead, the Chancellor has announced his plan for a cut in the basic rate of income tax for the first time in 16 years. This is the action my constituents want to see from Government to tackle the cost of living.
Photo above: Lucy Allan MP and Chancellor Rishi Sunak