MILLIONS of workers will save hundreds of pounds from November as MPs voted to reverse the tax hikes.
Liz Truss and Kwasi Kwarteng followed through on their promise to undo the health and social care levy with a Commons vote.
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It means the 1.25 percentage point rise in National Insurance which took effect in April will be reversed.
But the new PM and Chancellor have long promised to reverse it, and confirmed that in the recent mini-Budget.
The tax cut vote – which Labour backed – will come into effect on 6 November.
Kwasi Kwarteng said: “The Bill to cancel the Health & Social Care Levy has just concluded its passage through the House of Commons.
“We’re cutting tax for businesses and people across the country from 6 November. All part of our Growth Plan.”
Around 28 million workers across the UK are set to keep an extra £330 a year on average.
It also means that businesses paying National Insurance will get to keep more of their earnings, which ministers hope will be reinvested into the economy and help those who are struggling.
Most employees will see the tax cut in the November paypacket, but some will see it backdated in December or January.
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Basic rate taxpayers will on average see a gain of approximately £75 in 2022-23 rising to £175 in 2023-24.
For higher rate taxpayers, these figures are on average approximately £300 in 2022-23 rising to £700 in 2023-24.
For additional rate taxpayers, the gain will be on average approximately £1,650 in 2022-23 rising to £3,890 in 23-24.
The PM has promised that the extra cash will still go to the NHS and struggling social care, but hasn’t said how it would be funded.
The extra tax was expected to raise around £13billion a year.
Here’s how to work out how much you will save.
Those not paying National Insurance won’t benefit from the cut.
The news was confirmed as part of the Mini-Budget last month, which saw Kwasi Kwarteng reveal £45billion of tax cuts.
The Chancellor is set to reveal more details of his growth plan in his next fiscal statement – on October 31.
The Chancellor brought forward publication of an independent review of the numbers to October 31 — as experts warned he must cut £60billion to balance the books.
In a letter to MPs, Mr Kwarteng revealed his “Medium Term Fiscal Plan” will now come on October 31 instead of November 23.
In a bid not to spook the markets further, Mr Kwarteng will set out his strategy to get debt falling alongside the Office of Budget Responsibility’s delayed forecast.
The Treasury will be praying the package will stop the Bank of England dramatically raising mortgage repayments when they meet days later to set interest rates.
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This post first appeared on thesun.co.uk
