It is been a familiar story in recent years: a Budget that sounded reasonably good when delivered, but that unravels in subsequent days. Rishi Sunak’s spring statement was no exception. When he delivered it a fortnight ago, he said he was going to compensate low-earners by raising the primary threshold for National Insurance, bringing it into line with income tax and relieving people who earn less than £12,500 from having to pay NI at all. But as the 1.25 percentage point rise in National Insurance kicks in today, it turns out that the rise in the threshold for NI will not take effect for another three months, on 6 July. In the meantime, any employee who earns more than £9,880 a year will be paying 13.25 per cent of their earnings on NI.
As for the cut to the basic rate of income tax from 20 per cent to 19 per cent, we will have to wait two years for that.
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