08 Jan 2024
The government cut the main rate of Class 1 employee National Insurance contributions (NICs) from 12% to 10% on 6 January 2024.
The government says that this will reduce NICs by more than 15%. This provides a tax cut for 27 million working people, with the average worker on £35,400 receiving a cut in 2024/25 of over £450.
The cut was first announced by Chancellor Jeremy Hunt in the 2023 Autumn Statement.
The Chancellor also announced that, from 6 April 2024, the government will abolish Class 2 self-employed NICs.
Speaking on 6 January, Prime Minister Rishi Sunak said: 'We have made tough decisions on the economy, supporting people through global shocks such as the pandemic and Putin's illegal invasion of Ukraine. It is because of the tough decisions this government has taken that . . . we are able to cut taxes for 27 million people across the UK.
'[The] tax cuts will directly reward hard working people, putting £450 back in the pocket of the average worker and helping them make ends meet.'