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Chancellor of the exchequer Jeremy Hunt’s 2% National Insurance contributions (NIC) cut may not be as generous as he proclaimed in his 2024 Spring Budget.
The £10bn splurge on the 2% NIC cut was hailed by the government as offering the lowest effective personal tax rate in almost 50 years. But the continued big freeze on personal tax allowances and thresholds is more than offsetting the benefit of the NIC reduction with the Office for Budget Responsibility (OBR) forecasting the government will still yield an extra £6.6bn in 2024-25 despite the big tax giveaway.
Freezing income tax thresholds until 2028-29 means that more than three million people will be pulled into the higher and additional rates of income tax over the next five years leading to a net rise in tax receipts of £19.7bn.
The NIC cuts announced in the 2023 Autumn Statement and 2024 Spring Budget reverse...
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