Tax cut worth up to £330 comes in for 30 million UK workers

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In a meeting with at least 80 MPs last night, the Prime Minister told them: “I know you’re all avidly in favour of tax cuts and tonight’s events might make that a bit easier to deliver.” Picture by Tim Hammond / No 10 Downing Street

30 million people across the UK will benefit from the biggest personal tax in a decade from today – with hard working Brits saving up to £330 per year.

The £6 billion tax cut will see the level at which people start paying National Insurance rise to £12,570 – lifting 2.2 million people out of paying any personal tax and ensuring people get to keep more of the money they earn.

The threshold change means that 70% of UK workers will pay less National Insurance, even after accounting for the Health and Social Care Levy that is funding the biggest catch up programme in NHS history and putting an end to spiralling social care costs.

From today the level at which people start paying National Insurance has risen from £9,880 to £12,570.

This change means that millions of people working across hundreds of different industries across the UK will now be better off.

This includes bricklayers who’ll save £218, care workers who’ll save £324, hairdressers who will get a £118 benefit and nursery assistants who’ll get a £343 yearly boost.

Workers can check their salary in the government’s online tool to estimate the amount they could save between July 2022 to July 2023.

The last major personal tax cut of today’s magnitude was nearly ten years ago, when the income tax personal allowance increased by £1,100 in 2013. Today’s threshold change is more than double that, as working people are now able to hold on to an extra £2,690 free from tax.

Today’s change to National Insurance thresholds comes as part of the Government’s wider vision for a lower tax economy. At the Spring Statement the former Chancellor Rishi Sunak announced a 1p income tax cut in 2024 – which will be the first cut to the basic rate in 16 years and will save the average taxpayer a further £175 a year. Mr Sunak also committed to cutting and reforming business taxes later this year in the autumn, to help spur business growth and productivity, a move new Chancellor Nadhim Zahawi is keen to continue. The government say they are currently working with industry on how best to do that.

The increase to the National Insurance thresholds will leave around 76% of National Insurance payers in the North East better, 75% in the North West and Merseyside, and 62% in London.

Today’s landmark personal tax cut also comes as the government launched new Help for Households campaign designed to raise awareness and signpost people to the £37 billion in support on offer and targeted at those most in need. The support provides millions of the most vulnerable households at least £1,200 of support in total this year to help with the cost of living, with all domestic electricity customers receiving at least £400 to help with their bills.

It also includes a 5p fuel duty cut – the biggest cut ever to fuel duty rates, a rise in the national living wage to give full time workers an extra £1,000 and a cut to the Universal Credit taper rate to provide over 1 million families an extra £1,000.

The NICs threshold change takes effect following the government making tough but responsible decisions to manage the public finances responsibly and choosing not to saddle future generations with almost £400 billion of debt used to protect jobs and the economy during the pandemic – worth around £5,500 for every person in the UK.

Example occupations paying less National Insurance, even after accounting for the Health and Social Care Levy, below (list from ONS and checked through the government’s online tool):

OccupationMedian salary (£)Calculator result
Hospital porter19860£292 less
Shelf stacker12351£333 less
Security guard24814£246 less
Fork-life truck drivers25072£243 less
Van drivers20250£289 less
Lorry drivers30620£191 less
Construction workers26619£229 less
Sewing machinists16651£322 less
Tyre fitters22513£267 less
Metal workers22842£264 less
Retail cashiers and sales assistants10555 / 12071£112 less / £298 less
Hairdressers, beauticians and barbers10608£118 less
Care workers16502£324 less
Nursery assistants14462£343 less
Chefs17906£311 less
Butchers22561£267 less
Fishmongers18987£300 less
Bakers19933£292 less
Painters and decorators23224£261 less
Builders, floorers, wall tilers and plasterers25030£244 less
Bricklayers27756£218 less
Plumbers31602£182 less
Carpenters and joiners27520£220 less
Receptionists14317£344 less
Youth workers23136£262 less

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