Most employees will start to receive this tax cut directly through payroll between November and February.
Almost 28 million people will keep an extra £330 of their money on average next year, while 920,000 businesses will save an average of almost £10,000, the Treasury said.
The tax cut was announced by the government on 22 September as part of the reversal of the Health and Social Care Levy.
Working people across the UK will begin receiving the tax cut in their payslips this month with all expected to have started receiving it by February.
The move to reverse April National Insurance increase follows the rise in National Insurance thresholds in July. As a result of both measures, working people will be £500 better off, on average, next year.
Funding for health and social care services will be maintained at the same level as if the levy were in place.
The rise, which was set to be 1.25 per cent, had been announced by former prime minister Boris Johnson in April when Rishi Sunak was chancellor. The move was set to tackle social care and deal with the NHS backlog caused by COVID-19 but will not happen anymore.
Liz Truss first announced the reversal in September during her short-lived stint at PM, with the newest Chancellor Jeremy Hunt maintaining that decision. New PM Mr Sunak has also kept the reversal intact despite previously saying it had to be done.
“We must clear the Covid backlogs, with our plan for health and social care — and now is the time to stick to that plan. We must go ahead with the health and care levy. It is the right plan,” Mr Sunak said at the time.
“It is progressive, in the sense that the burden falls most on those who can most afford it. Every single penny of that £39 billion will go on these crucial objectives.”
However, the 1.25 per cent rise is now no longer happening with its reversal now in effect. The government said it means working people across the UK will “begin receiving the tax cut in their payslips this month” with all expected to have started receiving it “by February”.
