Chancellor Rishi Sunak confirmed the planned increase in the national insurance contribution (NIC) threshold, which will go up from £8,632 to £9,500 from April, reports Pat Sweet
Sunak said this represented a tax cut for 31 million million working people, saving the typical employee around £104 and a typical self-employed person around £78 in 2020-21. Taken together with increases to the national living wage (NLW) and to the personal allowance, an employee working full-time on the NLW anywhere in the UK will be over £5,200 better off compared to April 2010.
There is to be a new remit for the Low Pay Commission with a formal target that by 2024 the NLW will be two thirds of median earnings, which on current forecasts would reach £10.50.
The Chancellor also unveiled a NIC holiday for employers of veterans in first year of civilian employment. The holiday will exempt employers from any NICs liability on the veteran’s salary up to the upper earnings limit.
A full digital service will be available to employers from April 2022; however, transitional arrangements will be in place in the 2021-22 tax year which will effectively enable employers of veterans to claim this holiday from April 2021. The government will consult on the design of this relief.
Additional tax changes announced at the Budget include the abolition of the tampon tax so that from January 2021 there will be no VAT on women’s sanitary products.