Chancellor
of
the
Exchequer,
Jeremy
Hunt
has
expanded
his
previous
cuts
to
National
Insurance
(NI)
in
a
Budget
speech
that
contained
very
few
surprises
and
very
many
interruptions.
In
this
latest
move,
employee
NI
contributions
will
be
cut
by
an
extra
2p
from
10%
to
8%,
while
the
self-employed
will
also
see
a
NI
cut
from
8%
to
6%.
The
cuts,
which
come
into
effect
on
the
6th
of
April,
will
give
employees
and
the
self-employed
an
additional
£450
and
£350,
respectively,
Hunt
said.
When
combined
with
the
existing
reduction
announced
in
the
Autumn
Statement
last
November,
the
overall
change
will
hand
27
million
employees
and
self-employed
workers
an
average
tax
cut
of
£900
and
£650 –
again
respectively.
However,
Laura
Suter,
director
of
personal
finance
at
AJ
Bell,
said
the
cut
may
not
be
welcomed
by
all.
“Someone
on
£15,000
a
year
will
save
less
than
£50
a
year
on
their
NI
bill
as
a
result
of
today’s
reduction
–
and
will
save
less
than
£100
a
year
if
you
combine
today’s
cut
with
the
one
made
in
the
Autumn
Statement,”
she
said.
“The
highest
earners
will
be
feeling
short-changed
too,
as
someone
on
£100,000
a
year
will
save
the
same
amount
as
someone
earning
half
that
salary.
“While
some
may
struggle
to
muster
up
much
sympathy
for
those
earning
six-figures,
this
move
has
a
huge
impact
on
single
earner
households.”
Suter
also
points
out
cutting
NI
is
cheaper
than
cutting
income
tax
because
it
benefits
fewer
people,
a
fact
not
lost
on
a
chancellor
under
pressure
from
the
right
wing
of
his
party
to
cut
tax
harder
and
faster
than the
fiscal
climate
arguably
allows.
“Those
over
state
pension
age
don’t
pay
NI,
whereas
they
do
pay
income
tax.
Having
reportedly
committed
to
the
state
pension
triple
lock,
Hunt
has
clearly
decided
he
can
afford
to
annoy
a
few
pensioners
by
cutting
them
out
of
the
tax
savings
today,”
Suter
says.
After
Hunt’s
cuts
the
average
earner
will
now
have
in
effect
the
lowest
tax
rate
in
the
UK
since
1975,
he
claimed.
This
is
despite
the
effect
of
so-called
“fiscal
drag”,
the
effect
of
which
is
to
put
people
into
higher
tax
brackets
as
their
wages
grow
amid
rising
inflation.
“Today
a
Conservative
government
brings
down
taxes,”
Hunt
said,
to
cries
of
“no
you
didn’t”
from
the
opposition.
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