Kevin Brown, of the company, said Boris Johnson’s “tax cut” would not help lower-income households. “Despite some general cuts in premiums, middle-income households will still be much worse off thanks to inflation and its effect on wages,” he said.
Others pointed out that higher earners would ultimately pay more in NI this year, as the prime minister increased NI rates by 1.25 percentage points in April to help pay for health and social care.
Nick Bustin, of the tax office Haysmacintyre, said the threshold change was “not a panacea for alleviating the cost of living crisis”. He said the tax cut was a “knee-shock” response to the hike in rates just a few months earlier.
This, he said, had made it harder for people to understand how much better or worse they will be this year.
He added: “While those making less than £40,000 will generally be better off, make no mistake, these changes are complex. An employee who has remained on the same salary between March and July has paid three different amounts in NI.
“Last year a person making £20,000 would have paid £104 a month in NI contributions, in April that figure rose to £112 but it will now fall to £82,” he said. “Someone making £70,000 is now paying £467 a month, up from £439 before April – although less than the £499 they’ve paid in recent months.”