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Issue:
4930
/
Categories:
Comment & Analysis
, high-income child benefit charge
, National Insurance
, OBR
, Admin
, Income Tax
Relentless drip
Key points
- The continued freeze on personal tax allowances and thresholds is more than offsetting the benefit of the National Insurance contributions reduction.
- Over the next five tax years frozen thresholds and allowances will yield the government £174bn.
- The lifting of the high-income child benefit charge threshold to £60 000 does not fully take account of fiscal drag since 2013.
Chancellor of the exchequer Jeremy Hunt’s 2% National Insurance contributions (NIC) cut may not be as generous as he proclaimed in his 2024 Spring Budget.
The £10bn splurge on the 2% NIC cut was hailed by the government as offering the lowest effective personal tax rate in almost 50 years. But the continued big freeze on personal tax allowances and thresholds is more than offsetting the benefit of the NIC reduction with the Office for Budget Responsibility (OBR) forecasting the government will still yield an extra £6.6bn in 2024-25...
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