In a move to give taxpayers some respite from the cost of living crisis, Chancellor Rishi Sunak announced plans to raise the national insurance threshold by £2,690
The threshold will increase by £2,690 from the current £9,880 to £12,570 from 6 July 2022, equalising the NICs and income tax thresholds for the first time, and potentially pointing towards a merger of income tax and NICs into a single threshold.
Sunak said: ‘The current threshold for national insurance is £9,500 and I will increase this by £3,000 – equalising the NICs and income tax thresholds from July 2022. This is a £6bn tax cut for 30m people, and is the largest increase in the basic rate threshold ever. It is a tax cut that rewards work.’
The rise in the threshold will cut tax by an average £330 per worker and will effectively balance out the new social care levy for employees which comes into effect from 6 April. The total saving for the 2022-23 tax year will be £267.
