£769 NI tax cut set to be swallowed up by profusion of annual price increases

TAX cuts will give workers in Devon a boost – although much of that money will likely be gobbled up by a host of annual price rises.

According to the Government the typical worker in Devon will be £769 better off thanks to successive cuts to employee National Insurance contributions (NICs).

Around 27 million workers across the UK will see a boost to their take-home pay from April 6, with more than 2.4 million people benefiting in the South West.

The savings are a result of successive cuts to NICs announced, slashing the main rate of employee NICs from 12% to 8% and the main rate of self-employed NICs from 9% to 6%.

Taking the NICs reforms across autumn statement and spring budget together, the Treasury said this was an overall tax cut worth over £20 billion per year, the largest ever cut to employee and self-employed National Insurance.

Due to the combined cuts to employee and self-employed NICs, the OBR forecast that total hours worked would increase by the equivalent of almost 200,000 full-time workers by 2028-29.

Chancellor of the Exchequer Jeremy Hunt said: “The tax cuts coming into force this week show that our economic plan is working, putting £769 a year back into the pockets of working people across the South West. People will start to see this saving in their pay packet this month and, when it’s responsible to do so, we will go further – ending the unfair double tax on those who earn their income through work.”

The Treasury said these changes meant that for individuals on average salaries, personal taxes would have been lower in the UK than in France, Germany and every other G7 economy, based on the most recent OECD data.

However, the tax cut may not keep the pound in workers’ pockets for long with a number of household bills increasing this month.

Council tax is rising, while water bills – which in the South West are already the fourth highest in the country – will also go up.

Most broadband and mobile phone providers are also hiking prices and the TV licence fee will go up by 6.6% to £169.50, after being frozen for two years.

Vehicle tax is also rising, with the annual flat rate for a car registered on or after April 1, 2017, going up by £10. The amount due depends on the type of vehicle, when it was registered and when type of fuel is used.

NHS dental charges in England will increase by 4%, which means a standard check-up will cost £1 more, at £26.80. Some people are eligible for free dental care.

Meanwhile, young workers who drive may feel the pinch with reports earlier this year with insurance premiums rocketing.