National Insurance reversal comes into effect

The Government's reversal of the National Insurance contributions (NICs) increase is now in effect as of Sunday (6 November).

The majority of working people will begin receiving the 1.25% tax cut in their payslips from November onwards.

The rise in NICs was introduced in April as part of the health and social care levy, but was reversed by previous Chancellor Kwasi Kwarteng in the September mini-budget.

Despite the tax cut, the same levels of funding for the health and social care services will still be maintained.

The reversal follows a rise in NI thresholds in July. According to HMRC, almost 30 million people will save an average of £500 in 2023 as a result of these reforms.

However, some people may not benefit immediately from the reduction if their employers were unable to update payroll processes in time. These employees are expected to receive the tax cut by February 2023, and should benefit retrospectively once updates are applied.

Speaking on the policy's effects on business, HMRC said:

"Businesses who currently have NICs liabilities will pay less, allowing them greater scope to invest in their businesses and supporting the overall growth of the economy"

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