THE 1.25 per cent rise in National Insurance will be reversed from November 6 and not replaced, the Government has announced.
The rise was introduced in April under ex-Chancellor Rishi Sunak, but during the Tory leadership race Liz Truss pledged to change it.
Funding for health and social care will now come from general taxation.
Chancellor Kwasi Kwarteng made the announcement ahead of a “mini-budget” on Friday.
The Treasury said the change would save nearly 28 million people an average of £330 per year.
Most employees will get the tax cut in their November pay packets, with some getting it in December or January “depending on the complexity of their employer’s payroll software”, the Treasury said.
About 920,000 firms will get a tax reduction of nearly £10,000, it added.
