On Thursday in the House of Commons, Richard introduced the Bill to reverse the 1.25 percentage point rise in National Insurance from 6 November.
Delivering on the Prime Minister’s pledge to cut taxes to help drive growth, scrapping the rise will reduce tax for 920,000 businesses by nearly £10,000 on average next year as they will no longer pay a higher level of employer National Insurance and can now invest the money as they choose.
The government will also cancel the planned Health and Social Care Levy – a separate tax which was coming into force in April 2023 to replace this year’s National Insurance rise. This will help almost 28 million people across the UK keep more of what they earn, worth an extra £330 on average in 2023-24, with an additional saving of around £135 on average this year.
Richard Fuller, MP for North East Bedfordshire and Economic Secretary to the Treasury said:
Today I was pleased to present the Health & Social Levy Repeal Bill which will cut national insurance by 1.25% by repealing the increase of earlier this year.
Almost 28 million people will keep an extra £330 of their money on average next year, whilst 920,000 businesses are set to save almost £10,000 on average next year thanks to the change.
The Levy was expected to raise around £13 billion a year to fund health and social care but the Chancellor confirmed that the funding for health and social care services will be maintained at the same level as if the Levy was in place without a tax increase, protecting the NHS through the winter and ensuring long-term investment in social care. The additional funding used to replace the expected revenue from the Levy will come from general taxation. The Chancellor is committed to reducing debt-to-GDP ratio over the medium-term and boosting growth, which will help sustainably fund public services.
The Health and Social Care Levy (Repeal) Bill can be read here.
