Millions to pay less tax from April
Workers currently pay National Insurance Contributions (NICs) once they earn an annual income of £8,628.
However, Chancellor Sajid Javid has confirmed that in the 2020/21 tax year (from 6 April) the NIC threshold will rise to £9,500 a year.
This move means 31 million taxpayers will have more money in their pockets, with a typical employee saving around £104, while the self-employed who pay a lower rate, will see £78 shaved off their tax bills.
Javid said: “We’re determined to do what we promised and put more money into the pockets of ordinary hard-working people. That’s why we’re starting this government as we mean to go on, by cutting their bills.
“We want everyone to feel that they can contribute to the new chapter we are opening for the economy and our country, because under this government work will always pay.”
Since 2010 the personal allowance, the level at which people start paying income tax, has risen from £6,475 to £12,500, an increase of over 90% in less than a decade. The government said a typical basic rate taxpayer now pays over £1,200 less income tax compared to 2010/11.