The typical worker in Wales will be £701 better off thanks
to successive cuts to employee National Insurance contributions
(NICs), which hit pay packets this month.
27 million workers across the UK will see a boost to their
take-home pay from 6 April, with over 1.2 million people to
benefit in Wales alone.
The savings are a result of successive cuts to NICs announced by
the Chancellor, slashing the main rate of employee NICs from 12%
to 8% and the main rate of self-employed NICs from 9% to
6%.
These cuts are possible because the economy is turning a corner,
thanks to the government's decisive action to bring inflation
down from 11.1% to 3.4%. The government is sticking to its
economic plan and in the longer-term, it has the ambition to cut
NICs further, ending the unfair double tax on work.
Chancellor of the Exchequer Jeremy Hunt said:
The tax cuts coming into force this week show that our economic
plan is working, putting £701 a year back into the pockets
of working people across Wales.
People will start to see this saving in their pay packet this
month and, when it's responsible to do so, we will go further –
ending the unfair double tax on those who earn their income
through work.
Secretary of State for Wales David TC Davies said:
I'm delighted that over 1.2 million workers in Wales will benefit
from today's National Insurance cut, which is on top of the first
2p cut in January this year, putting £700 more into the typical
worker's pocket. Inflation is coming down as well, helping people
feel better off as the economy is turning a corner.
Taking the NICs reforms across Autumn Statement and Spring Budget
together, this is an overall tax cut worth over £20 billion per
year, the largest ever cut to employee and self-employed National
Insurance.
Due to the combined cuts to employee and self-employed NICs, the
OBR forecast that total hours worked will increase by the
equivalent of almost 200,000 full-time workers by 2028-29 and
help grow the economy.
These changes mean that for single individuals on average
salaries, personal taxes would have been lower in the UK than in
France, Germany and every other G7 economy, based on the most
recent OECD data.
ENDS
Notes to Editors
- The gain is based on an average salary of £30,101 in
Wales. Calculations are based on the mean all-employee annual
earnings level, using the ONS' Annual Survey of Hours and
Earnings for 2023.
