London Daily

Focus on the big picture.
Friday, Aug 29, 2025

National Insurance rise to be reversed in November

National Insurance rise to be reversed in November

A 1.25% rise in National Insurance will be reversed from 6 November and the government will axe a planned levy to fund health and social care.

The rise was introduced in April under ex-Chancellor Rishi Sunak, but during the Tory leadership race Liz Truss pledged to change it.

The funding for health and social care will now come from general taxation.

Chancellor Kwasi Kwarteng made the announcement ahead of a "mini-budget" on Friday.

The Treasury said the change would save nearly 28 million people an average of £330 per year.

Most employees will get the tax cut in their November pay packets, with some getting it in December or January "depending on the complexity of their employer's payroll software", the Treasury said.

About 920,000 firms will get a tax reduction of nearly £10,000, it added.

National Insurance is a tax paid by employees, employers and the self-employed.

Employees pay National Insurance on their wages as well as income tax, employers pay extra NI contributions for staff, and the self-employed pay National Insurance on their profits.

"Taxing our way to prosperity has never worked," Mr Kwarteng said.

"To raise living standards for all, we need to be unapologetic about growing our economy. Cutting tax is crucial to this."

The National Insurance rise was put in place to help the NHS recover from the coronavirus pandemic, and the planned social care levy was also designed to support the NHS from April.

The levy was expected to raise around £13bn a year to fund social care and deal with an NHS backlog that built up during Covid.

There are weekly thresholds for National Insurance. There is nothing to pay on the first £242 earned per week, then its 13.25% on earnings between £242.01 and £967 and 3.25% on the rest.

That means, in general,people who earn more than £12,570 a year pay National Insurance, and the more they earn, the more they will benefit from this change.

For example, somebody earning £20,000 will save about £93 a year, and somebody earning £100,000 will save £1,093, compared to now.

From April 2023 Mr Kwarteng will also scrap an increase to dividend tax. This change was brought in alongside the payroll tax increase to raise taxes on people paid in a different way.


Kitty Ussher, chief economist at the Institute of Directors industry body, said raising employers' National Insurance had been "a mistake".

"This was quite simply a tax on jobs, which businesses had to pay regardless of whether they are profitable," she said.

"Many of our members told us that the impact of the increase was that they would have no choice but to push up prices, making inflation even worse.

"Others said the rise in the cost of employing people meant they would think twice about taking new staff on, or potentially make the difficult decision to let colleagues go."

The government announcement came ahead of a "mini-Budget" which is expected to be announced on Friday.

Measures could include:

* Scrapping a planned increase in the tax companies pay on their profits

* Possible cuts to other taxes, including stamp duty which is paid on house purchases

* Ending the cap on bankers' bonuses

* Plans to boost economic growth, such as creating low-tax zones around the UK

Newsletter

Related Articles

0:00
0:00
Close
Bruce Willis Relocated Due to Advanced Dementia
French and Korean Nuclear Majors Clash As EU Launches Foreign Subsidy Probe
EU Stands Firm on Digital Rules as Trump Warns of Retaliation
Getting Ready for the 3rd Time in Its History, Germany Approves Voluntary Military Service for Teenagers
Argentine President Javier Milei Evacuated After Stones Thrown During Campaign Event
Denmark Confronts U.S. Diplomat Over Covert Trump-Linked Influence in Greenland
Starmer Should Back Away from ECHR, Says Jack Straw
Trump Demands RICO Charges Against George Soros and Son for Funding Violent Protests
Taylor Swift Announces Engagement to NFL Star Travis Kelce
France May Need IMF Bailout, Warns Finance Minister
Chinese AI Chipmaker Cambricon Posts Record Profit as Beijing Pushes Pivot from Nvidia
After the Shock of Defeat, Iranians Yearn for Change
Ukraine Finally Allows Young Men Aged Eighteen to Twenty-Two to Leave the Country
The Porn Remains, Privacy Disappears: How Britain Broke the Internet in Ten Days
YouTube Altered Content by Artificial Intelligence – Without Permission
Welcome to The Definition of Insanity: Germany Edition
Just a reminder, this is Michael Jackson's daughter, Paris.
Spotify’s Strange Move: The Feature Nobody Asked For – Returns
Manhunt in Australia: Armed Anti-Government Suspect Kills Police Officers Sent to Arrest Him
China Launches World’s Most Powerful Neutrino Detector
How Beijing-Linked Networks Shape Elections in New York City
Ukrainian Refugee Iryna Zarutska Fled War To US, Stabbed To Death
Elon Musk Sues Apple and OpenAI Over Alleged App Store Monopoly
2 Australian Police Shot Dead In Encounter In Rural Victoria State
Vietnam Evacuates Hundreds of Thousands as Typhoon Kajiki Strikes; China’s Sanya Shuts Down
UK Government Delays Decision on China’s Proposed London Embassy Amid Concerns Over Redacted Plans
A 150-Year Tradition to Be Abolished? Uproar Over the Popular Central Park Attraction
A new faith called Robotheism claims artificial intelligence isn’t just smart but actually God itself
Deputy Prime Minister Angela Rayner Purchases Third Property Amid Housing Tax Reforms Debate
HSBC Switzerland Ends Relationships with Over 1,000 Clients from Saudi Arabia, Lebanon, Qatar, and Egypt
Sharia Law Made Legally Binding in Austria Despite Warnings Over 'Incompatible' Values
Italian Facebook Group Sharing Intimate Images Without Consent Shut Down Amid Police Investigation
Dutch Foreign Minister Resigns Amid Deadlock Over Israel Sanctions
Trump and Allies Send Messages of Support to Ukraine on Independence Day Amid Ongoing Conflict
China Reels as Telegram Chat Group Shares Hidden-Camera Footage of Women and Children
Sam Nicoresti becomes first transgender comedian to win Edinburgh Comedy Award
Builders uncover historic human remains in Lancashire house renovation
Australia Wants to Tax Your Empty Bedrooms
MotoGP Cameraman Narrowly Avoids Pedro Acosta Crash at Hungarian Grand Prix
FBI Investigates John Bolton Over Classified Documents in High-Profile Raids
Report reveals OpenAI pitched national ChatGPT Plus subscription to UK ministers
Labour set to freeze income tax thresholds in long-term 'stealth' tax raid
Coca‑Cola explores sale of Costa coffee chain
Trial hears dog walker was chased and fatally stabbed by trio
Restaurateur resigns from government hospitality council over tax criticism
Spanish City funfair shut after serious ride injury
Suspected arson at Ilford restaurant leaves three in critical condition
Tottenham beat Manchester City to go top of Premier League
Bank holiday heatwave to hit 30°C before remnants of Hurricane Erin arrive
UK to deploy immigration advisers to West Africa to block fake visas
×