Mini-budget tax calculator – how Rishi Sunak’s spring filing changes will affect you

RISHI Sunak gave millions of workers a tax cut in his spring statement.

The threshold at which you start paying National Insurance will increase by around £3,000 from July, meaning you can earn more without paying tax.


Tax changes are coming in April and July and will affect your take home payCredit: Alamy

And some low-income people will be totally exempt from tax.

But the surprise move follows an already planned hike in national insurance rates of 1.25 percentage points from April.

This means that some workers will be better off and save money by paying less tax, while others will pay even more.

Meanwhile, millions of drivers will pay less tax after the Chancellor cut fuel tax by 5p.

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The reduction will reduce the cost of filling a tank by an average of £3.30, saving money on annual fuel costs.

And this fuel tax change has already been introduced at some petrol stations, including those of Asda, Tesco and Sainsbury’s, which are reducing petrol prices.

Mr Sunak also promised to cut income tax and cut the basic rate from 20p a pound to 19p.

But this change won’t happen until 2024, so you won’t benefit from it yet, unfortunately.

All in all, there’s a lot going on with the tax changes, which might have you wondering if you’re better off or not.

That’s why we’ve developed The Sun’s Tax Calculator, created with tax advisers Blick Rothenberg, to help you work out how much tax you’ll pay and your take-home pay.

You can find The Sun’s tax calculator here.

The calculator includes how much better (or worse) you will be after the two changes to National Insurance from July.

The more you earn, the less you earn from the National Insurance changes, as the tax hike outweighs the raised threshold.

Around the £35,000-£41,000 mark is the point where there’s no net benefit whatsoever from adjustments. But the exact amount depends on your situation.

How are taxes changing in April?

National insurance rates are different depending on your income.

Currently the rates are 12% on income between £184 and £967 and above this amount 2%.

The April hike will hit the finances of around 25 million Britons, who will have to pay an additional 1.25 percentage points.

This means that the new rates will be 13.5% and 3.25% respectively.

As the rates are a percentage of your income, the exact amount you will pay more will depend on your situation.

Currently, someone earning £15,000 a year pays contributions of £652, while another person earning an annual salary of £25,000 is taxed £1,852 each year.

On earnings of £15,000, the increase will mean paying an additional £68 a year, and an additional £25,000 and £193.

How are taxes changing in July?

You pay National Insurance when you are employed and earn more than £9,568 a year, or £184 a week.

This was already rising slightly in April to £9,880 but will rise again to £12,570.

Mr Sunak said in his spring statement announcing the change that it will be worth around £330 a year.

But that doesn’t take into account the April rate hike.

Calculations reveal that someone winning £10,000 will win £11 in total.

While they will be £1 worse off due to the rise in NICs, this is more than offset by the raised thresholds, giving them £11 more.

Meanwhile, a worker on £17,289, the National Living Wage, will earn a total of £242 after earning £332 from the raised threshold and losing £90 in tax.

The self-employed will also benefit from a tax reduction thanks to changes to national insurance.

Low-income people working on their own could get tax relief of up to £165 a year.

The lower earnings limit, which is the threshold at which you start paying self-employed NICs, will increase from £9,880 to £12,570 from July.

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Below this amount you will not have to pay class 2 national insurance contributions.

Class 2 dues are a tax of £3.05 per week, and it is usually payable by the self-employed with an income above the small profits threshold of £6,515.

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Esther L. Steinbach