Spring Budget: PwC comments on 'welcome cut to NICs but continued threshold freeze the sting in the tail'

Christine Cairns, tax partner at PwC, comments on the personal tax measures announced at the Spring Budget:

“While not as impactful as the rumoured reduction to the headline income tax rate, the further fall in National Insurance Contributions will act as another welcome and almost immediate cut in taxes for the squeezed working population. This cut will be funded by an increase in duty on tobacco and vapes, as well as the changes to the ‘non-dom’ tax regime which increases the taxes paid to the UK on overseas income and gains but also encourages a window of inward investment in the UK by removing the ‘remittance basis’ of taxation for these individuals.

“The hidden sting in the tail is the continued frozen tax thresholds which will eat into any savings achieved by the NIC cut over the next four years.

“The anticipated reform to the ISA system came in the form of a new British ISA which allows a further £5,000 tax free investment into UK equities on top of the current limits which remain unchanged, as well as a British Savings Bond. This will benefit wealthier savers, encouraging them to invest in UK-focused assets, with the aim of stimulating the economy in a targeted way.”