National Insurance rise to be reversed from 6 November

Chancellor Kwasi Kwarteng has announced that April’s National Insurance hike is to be reversed from 6 November.

The 1.25% rise was introduced under former chancellor Rishi Sunak, but during the Tory leadership race Liz Truss pledged to change it.

Mr Kwarteng made the announcement ahead of a “mini-budget” on Friday.

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He said: “Taxing our way to prosperity has never worked.

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

The Treasury said most employees will receive a cut to their national insurance contribution directly via their employer’s payroll in their November pay, although some may be delayed to December or January.

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In a tweet, Mr Kwarteng called it a “tax cut for workers”.

The tax hike was introduced with the immediate aim of addressing the NHS backlog and funding social care sector improvements in future years.

However, Ms Truss argued it was wrong of her party to break its 2019 manifesto commitment not raise taxes, and said the extra funds can be raised through general taxation.

The government tabled legislation in the Commons on Thursday to enact the tax changes.

MPs are expected to vote on repealing the health and social care levy once they return from party conferences in October.

Downing Street said the repeal Bill was part of the government’s commitment to “a low tax, high growth” economy.

“This is delivering on a commitment the PM made on the (Tory leadership) campaign trail,” a No 10 spokeswoman said.

The move comes ahead of Chancellor Kwarteng’s “fiscal event” on Friday when he will set out more details of the government’s plans to cut taxes, including scrapping a planned rise in corporation tax.