Chancellor Kwasi Kwarteng announced various personal tax cuts
Chancellor Kwasi Kwarteng announced various personal tax cuts in today’s emergency budget and has notably reversed the rise in national insurance contributions which will now be reduced from 6 November 2022. The planned Health and Social Care levy has also been cancelled and was initially introduced via a 1.25% rise in NICs which was to take effect from April 2023.
This measure will help raise the living standards of 28 million people in the UK as they can now keep more of what they earn. 60% of businesses will now be able to re-invest, create more jobs, and help support the growth of the economy. It is expected that the average taxpayer will benefit from an extra £330 in 2023-24 with an additional benefit of £135 this tax year. However, employers will need to update their payroll software before 6 November 2022 if employees are to see this benefit in 2022-23.
For those who are self-employed and directors, this will mean they will now pay a blended rate of national insurance considering the changes throughout the tax year.
Although there were concerns that the Levy was proposed to help raise £13 billion for health and social care, the Chancellor confirmed that funding will be made available to maintain this figure and support the NHS through long-term investments.
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