Millions of workers will receive a National Insurance cut in their next payslips as the new tax year gets underway.

The main rate of employee national insurance has been cut by two per cent from 10 per cent to eight per cent.

It is the second cut in the last six months following an identical reduction from 12 per cent to 10 per cent after last year’s autumn statement.

When combined, the two cuts will save the average worker on £35,400 more than £900 a year, the Government has said.

Despite the National Insurance cuts, some other thresholds may act as a “stealth tax” and make people feel worse off just by being left unchanged.

Frozen income tax bands pull people into higher brackets over time as their pay increases.

The standard personal allowance is £12,570, which is the amount of income that someone does not have to pay tax on.

Prime Minister Rishi Sunak said: “Hard work is one of my core values, and the progress we have made on the economy means we can reward work with a tax cut worth £900 for the average earner.

“This marks the next step in our plan to end the unfairness of double taxation of work by abolishing national insurance in the long term.”

Rachel Reeves, Labour’s Shadow Chancellor, said: “Every time Rishi Sunak goes on the television claiming he is cutting taxes, he is insulting the intelligence of hard-working families.”

She accused the Government of “giving with one hand and taking with another”.

Changes to child benefit

Millions of families who claim Child Benefit will automatically receive increased payments from today.

HMRC has confirmed that families with one child will now receive £1,331 per year, an increase of more than £83.

Families will also receive £881 per year for each additional child they have after that, an annual increase of £54.60.

From today, families where the highest earner has a salary of up to £60,000 a year will not be subject to the High Income Child Benefit Charge (HICBC). Previously, a person who had an annual income of £50,000 or more would be liable to pay the charge if they or their partner were receiving Child Benefit.

Laura Trott, Chief Secretary to the Treasury, added: “We are ending the unfairness in the child benefit system, and as a result 170,000 families will no longer have to pay back child benefit, and nearly half a million families will save an average of around £1,300 next year.

“The legacy of the pandemic and the war in Ukraine has put pressures on everyone’s cost of living. But, by taking difficult decisions, the economy is starting to turn a corner, and we can now provide further support to parents.”