HMRC to hand £450 to workers with this code on payslip in election promise | Personal Finance | Finance

Households across the UK are being promised another £450 average handout in the Conservatives’ election manifesto.

After two National Insurance cuts this year – one in February, one in April – worth an average of £900 together, Rishi Sunak has pledged to hand out another £450 average boost to households this year in a bid to win back votes.

Prime Minister Rishi Sunak announced that the HMRC change announced in the Government’s Spring Budget will officially take effect from Tuesday, meaning that workers on the average HMRC tax code will start receiving a second boost this year, making an average of £900 back into your payslip.

But the exact amount you’ll get back depends on your tax situation and those with certain tax codes on their payslip will definitely get up to the full amount possible, depending on your income.

If you are earning the UK average salary, your tax code will be 1257L. If you have this code on your payslip, you will definitely get the extra money back in your payslip – at least £200 and an average of £450.

National Insurance contributions were reduced from 10 percent to 8 percent following a cut from 12 percent to 10 percent in January and Rishi Sunak plans to go one step further and cut from 8 to 6 percent with the goal of abolishing the tax altogether in future.

National Insurance is only applied to earnings between the personal allowance of £12,570 and £50,270, so if you earn more than that, you’ll still get the full benefit of the cut but you won’t get any more than someone earning £50,270.

If you have the code NT on your payslip, you won’t get any extra money from NI cuts because you haven’t met the £12,570 threshold yet and you aren’t paying tax on your income to get tax back.

Speaking about the previous National Insurance cuts, The UK Government guidance explained: “As a result of this measure, an average employee on £35,400 will receive a tax cut of over £450 per year from April 2024. An average self-employed person on £28,000 will see a tax cut of £310 a year and over 2 million individuals will benefit. Actual impacts for individual taxpayers will vary according to individual circumstances.”

Of course, the £450 is a Conservative manifesto election promise and has not yet been confirmed and no date has been given for when it would be put in place.

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