UK cuts national insurance contributions for workers in spring budget

Release time：2024-05-21 11:54:34 Source：Worldly Wisdom news portal

The United Kingdom's (UK) Chancellor of the Exchequer Jeremy Hunt (1st R) leaves 11 Downing Street to deliver his budget to Parliament in London, Britain, on March 6, 2024. The United Kingdom's (UK) Chancellor of the Exchequer Jeremy Hunt on Wednesday announced in his spring budget that National Insurance contributions would be cut for 27 million British workers. (Xinhua)

LONDON, March 6 (Xinhua) -- The United Kingdom's (UK) Chancellor of the Exchequer Jeremy Hunt on Wednesday announced in his spring budget that National Insurance contributions would be cut for 27 million British workers.

From April 6, employees' National Insurance, a payroll tax, will be cut from 10 percent to 8 percent. Meanwhile, self-employed national insurance will be cut from 8 percent to 6 percent, said Hunt when delivering this year's budget speech in the House of Commons. It is the last budget ahead of the next general election.

"It means an additional 450 pounds (573 U.S. dollars) a year for the average employee, or 350 pounds for someone self-employed," said Hunt.

The move came after a two-percentage-point cut for national insurance from 12 percent to 10 percent in November 2023.

The independent Office for Budget Responsibility (OBR) has estimated that the combined national insurance cuts will mean the equivalent of 200,000 more people in work -- filling one in five vacancies and adding 0.4 percent to GDP per head.

In the Budget, Hunt also raised the child benefit threshold from 50,000 pounds to 60,000 pounds from this April. The taper at which the benefit is withdrawn will also be increased to 80,000 pounds.

"Because of the higher taper and threshold, nearly half a million families with children will save an average of around 1,300 pounds next year," he said.

For businesses in the UK, the chancellor announced that the VAT registration threshold would be increased from 85,000 pounds to 90,000 pounds from April 1.

Hunt also extended the alcohol duty freeze to February 2025, to "benefit 38,000 pubs across the UK." The duty freeze was supposed to end this August.

An excise duty on vaping products will be introduced from October 2026, as well as a one-off increase in tobacco duty, said Hunt.

The chancellor also extended the Energy Profits Levy, a windfall tax on the profits of energy companies, for an additional year to 2029. This will raise 1.5 billion pounds, he said.

According to the OBR, UK inflation is expected to fall below the 2 percent target set by the central bank in a few months' time, Hunt said in his speech.

The OBR has also forecast that the UK economy will grow by 0.8 percent this year, and by 1.9 percent next year. (1 pound = 1.28 U.S. dollars)

The United Kingdom's (UK) Chancellor of the Exchequer Jeremy Hunt poses for photographs as he leaves 11 Downing Street to deliver his budget to Parliament in London, Britain, on March 6, 2024. The United Kingdom's (UK) Chancellor of the Exchequer Jeremy Hunt on Wednesday announced in his spring budget that National Insurance contributions would be cut for 27 million British workers. (Xinhua)

The United Kingdom's (UK) Chancellor of the Exchequer Jeremy Hunt (2nd L) poses for photographs as he leaves 11 Downing Street to deliver his budget to Parliament in London, Britain, on March 6, 2024. The United Kingdom's (UK) Chancellor of the Exchequer Jeremy Hunt on Wednesday announced in his spring budget that National Insurance contributions would be cut for 27 million British workers. (Xinhua)

The United Kingdom's (UK) Chancellor of the Exchequer Jeremy Hunt poses for photographs as he leaves 11 Downing Street to deliver his budget to Parliament in London, Britain, on March 6, 2024. The United Kingdom's (UK) Chancellor of the Exchequer Jeremy Hunt on Wednesday announced in his spring budget that National Insurance contributions would be cut for 27 million British workers. (Xinhua)

The United Kingdom's (UK) Chancellor of the Exchequer Jeremy Hunt poses for photographs as he leaves 11 Downing Street to deliver his budget to Parliament in London, Britain, on March 6, 2024. The United Kingdom's (UK) Chancellor of the Exchequer Jeremy Hunt on Wednesday announced in his spring budget that National Insurance contributions would be cut for 27 million British workers. (Xinhua)

The United Kingdom's (UK) Chancellor of the Exchequer Jeremy Hunt poses for photographs as he leaves 11 Downing Street to deliver his budget to Parliament in London, Britain, on March 6, 2024. The United Kingdom's (UK) Chancellor of the Exchequer Jeremy Hunt on Wednesday announced in his spring budget that National Insurance contributions would be cut for 27 million British workers. (Xinhua)

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