A 1.25% rise in National Insurance will be reversed from 6 November and the UK Government will axe a planned levy to fund health and social care.

The rise was introduced in April under ex-Chancellor Rishi Sunak, but during the Conservative leadership race, Liz Truss pledged to change it.

The funding for health and social care will now come from general taxation.

Chancellor Kwasi Kwarteng made the announcement ahead of a “mini-budget” on Friday.

The Treasury said the change would save nearly 28 million people an average of £330 per year.

Most employees will get the tax cut in their November pay packets, with some getting it in December or January “depending on the complexity of their employer’s payroll software”, the Treasury said.

About 920,000 firms will get a tax reduction of nearly £10,000, it added.

National Insurance is a tax paid by employees, employers and the self-employed. Employees pay National Insurance on their wages as well as income tax, employers pay extra NI contributions for staff, and the self-employed pay National Insurance on their profits.

Responding to the Chancellor’s announcement that the 1.25% increase in National Insurance Contributions (NICs) will be reversed from November, Liz Cameron CBE, Chief Executive of the Scottish Chambers of Commerce (SCC), said:

“It is very welcome that the UK Government have acted on the calls of the SCC Network and the Scottish business community for the increase to NICs to be reversed.

“This has been long-awaited and will help firms struggling to recruit.

“There is undoubtedly more to be done, with tomorrow’s fiscal statement from the Chancellor being the perfect opportunity for the UK Government to put forward a clear-long term plan to support businesses through the cost emergency and beyond.

“The Chancellor must look at all options and back businesses to drive forward a path to strong growth and investment.”

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