The Chancellor is widely reported to have decided to cut national insurance rather than the more expensive option of a 2p reduction in income tax. Experts warned that a 2p reduction in national insurance contributions would not by itself be enough to stop the tax burden reaching record levels by the end of this decade. The Chancellor will reportedly announce a 2p cut to National Insurance contributions in tomorrow’s Budget. But, combined with freezes in the thresholds at which national insurance is paid, it will mean that the biggest net beneficiaries are those earning £50,000, who gain a net £1,200, the foundation said. The Resolution Foundation said the £20 billion of cuts to employee national insurance are set against the context of around £35 billion of tax rises through the six-year personal tax threshold freeze.
