Martin Lewis: Expert talks about National Insurance credits
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The threshold where Britons start to pay National Insurance Contributions (NICS) has increased by £3,000 today going from £9,880 to £12,570. The plan, announced by former Chancellor Rishi Sunak in his Spring Statement this year, will mean that some Britons will see their take-home pay rise by £330. The Government said that the tax cut will impact around 30 million people or around 70 percent of UK workers. Those who earn less than around £35,000 a year will see the majhority of the benefit.
Those who earn more are not going to be impacted as greatly.
The Government claim that the increase will leave around 76 percent of National Insurance payers in the North East financially bettter.
They state three-quarters of people in the North West and Merseyside will be better off and 62 percent of those in London will benefit.
It will also mean that 2.2 million people will not have to pay National Insurance as their annual income is now below the threshold
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The Treasury states, according to the average salary, bricklayers will save around £218, care workers £324, hairdressers £118, and nursery assistants will see a yearly increase of £343.
People who are paid through PAYE are able to check how much they may be saving on the Government’s online tax calculator.
The checker will show an estimated amount of National Insurance that the person pays for from July 2022 to June 2023.
It will then compare it to how much they would pay from July 2022 and June 2023.
In a statement, the Prime Minister Boris Johnson said: “We know it’s tough for many families across the UK, but we want you to know that this government is on your side.
“Today’s tax cut means around 70 per cent of British workers will pay less National Insurance – even after accounting for the Health and Social Care Levy that is funding the biggest catch up programme in NHS history and putting an end spiralling social care costs.
“So whether you are a receptionist, work in hospitality or are a delivery driver, this tax cut is likely to make you and your family better off.”
National Insurance is used to pay for things such as state pension, statutory sick pay, maternity leave, and a number of state benefits.
The former Chancellor announced in September last year that the rate people in the UK would pay was set to increase by 1.25 percentage points.
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This took the rate from 12 percent to 13.25 percent.
The Government stated that the increase was going to fund the NHS and would turn into a separate tax later on called the Health and Social Care Levy.
Each year the levy is expected to raise around £12billion for the Government.
Even with this increase, the Government claim that seven out of 10 workers will be paying less National Insurance with the threshold change today.
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