Conservative party tees up a National Insurance tax cut in its election manifesto
Boris Johnson is preparing to give a tax cut of up to £460 to the country’s lowest earners if victorious at next month’s general election.
The Conservative party is reportedly planning on doing this by raising the wage threshold at which people start to pay National Insurance as a part of the Tories’ election manifesto.
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The current threshold is £8,632, however it has been suggested this could rise to £12,500, according to The Sunday Telegraph.
This would be in line with the minimum threshold to pay income tax and provide a tax cut of £460 to the average worker.
It would exempt 2.4m people from paying any National Insurance contributions, according to the Institute for Fiscal Studies.
Business secretary Andrea Leadsom told The Sunday Telegraph today that the party is committed to cutting taxes in its manifesto.
“A Conservative government will always be a tax-cutting government,” she said.
Johnson initially indicated a willingness to increase the National Insurance threshold during the summer’s Conservative leadership campaign.
He said: “I think we should be looking at lifting people on low incomes out of tax, lifting the thresholds for national insurance and I would remind you that that’s where my priority is.
“When I was mayor of London we led the way, for instance with the London living wage and I think lifting National Insurance contribution thresholds would be another good thing to do.”
National Insurance is taken from workers’ salaries and used to fund the NHS, benefits and the state pension.
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Each £1,000 increase of the wage threshold will take away £3bn in tax revenues, according to a study by the Institute for Fiscal Studies.
The institute also said that increasing the National Insurance threshold was “probably the best thing one can do” to give tax relief to low earners.