A new online tool to show how the take home pay of 30 million
hard-working Brits will be boosted by the imminent £6 billion
National Insurance tax cut was launched today (20 June).
With the historic tax cut just weeks away, the online checker
will use salary information to give employees personalised
estimates of how much they could save because of the government’s
changes.
The cut, which will see the point at which people start paying
National Insurance rise to £12,570, is worth up to £330 and seven
in ten workers will pay less National Insurance even after
accounting for the Health and Social Care Levy.
, Chancellor of the Exchequer
said:
“With our historic £6 billion National Insurance tax cut just
weeks away, this new tool will show hard-working Brits how much
more of their pay will be going directly into their pocket.”
“This tax cut, combined with £400 off energy bills and direct
payments of £1,200 to 8 million families, will help shield people
from rising prices.”
Alongside this tool, the government has also launched a new
Financial Support and Benefits Checker Tool. It enables people to
answer 10 simple questions to find out what support they might be
eligible for by cross-checking against 25 individual benefits and
support offers. This should help people find out what support
they may be eligible for that they may currently not be accessing
and is part of the government’s drive to help people manage the
increased cost of living.
Both tools will be hosted on the government’s gov.uk Cost of
Living page.
The new online tax tool will give personalised estimates for
employees paid monthly through the PAYE system of how the tax
cut, which comes into effect from 6 July, will boost take home
pay. This will help people budget during this challenging time by
seeing how much they will be saving in tax.
Everyone who pays National Insurance will see a tax cut, and the
tool will show that employee earning up to £51,000 will see this
cut more than offset the impact of the Health and Social Care
Levy. This means the majority of working people will see a boost
to their take home pay.
The tax cut is part of the biggest net cut to personal taxes in a
quarter of a century, which was announced by the Chancellor
earlier this year, and includes a cut to the basic rate of income
tax of 1 percentage point from April 2024. This is the first cut
to the basic rate of income tax in 16 years, benefiting 30
million taxpayers by £175 on average.
This tax cut comes on top of the £1,200 in direct payments the
Government will provide for the most vulnerable people in the
country and universal support worth £400 as a discount on energy
bills from October.
This takes total Government support to £37 billion this year,
helping tens of millions of people across the country from rising
cost of living triggered by Putin’s illegal war in Ukraine.
Notes to editors
Further information:
- The online tools can be accessed via: www.gov.uk/costoflivingsupport
- The National Insurance tool estimates the change to National
Insurance contributions based on annual salary, if tax is paid
via the PAYE system, taking into account both the change to the
National Insurance thresholds and the introduction of the Health
and Social Care Levy.
- It estimates how much National Insurance an employee would
pay from July 2021 to June 2022 and compares it with how much
they would pay from July 2022 and June 2023.
- It is not suitable for every situation and does not provide a
calculation of an individuals’ National Insurance contributions
liabilities.
- This first version of the Financial Support and Benefits
Checker Tool includes a selection of benefits and other sources
of financial support, such as childcare support, Job Seeker’s
Allowance, budgeting loans and housing benefit. A wider range of
options will be included in another version in the next few
months. It will launch mid-morning on Monday 20th.
