The national insurance hike introduced by Boris Johnson’s government will be reversed from November 6, Chancellor Kwasi Kwarteng has announced.
Ahead of his mini-budget on Friday, Mr Kwarteng confirmed that he was canceling the 1.25 percentage point increase imposed by Rishi Sunak when he was chancellor to pay for social care and deal with the NHS backlog.
Mr. Kwarteng said he would also be scrapping the planned Health and Social Care Levy which was due to come into effect next April to replace the national insurance rise.
The Government tabled legislation in the Commons on Thursday to enact the tax changes.
Mr. Kwarteng said: “Taxing our way to prosperity has never worked. To raise living standards for all, we need to be unapologetic about growing our economy.
“Cutting tax is crucial to this – and whether businesses reinvest freed-up cash into new machinery, lower prices on shop floors or increased staff wages, the reversal of the levy will help them grow, whilst also allowing the British public to keep more of what they earn.”
The Treasury said most employees will receive a cut to their national insurance contribution directly via their employer’s payroll in their November pay, although some may be delayed until December or January.