We ran the workings for these calculations by the Chartered Institute of Taxation who corroborated our findings. This value will always be negative if you earn more than £12,570. We have also assumed that the taper, when you start losing your personal allowance, starts at £100,000 and you lose £1 for each additional £2 earned, as it was before. To work out how much fiscal drag has cost you, we have applied the new thresholds from the OBR to the lower 20% rate of tax, the higher 40% rate, and the highest 45% rate.
This value will always be positive if you earn more than £12,570. To work out how much less national insurance people will pay in 2024/25, we have worked out how much you would have paid on the 12% rate with the current thresholds, and how much you will pay on the 8% rate.
Sky News has taken figures for what the new thresholds from 6 April 2024 would have been if they had increased with inflation from the Office for Budget Responsbility (OBR). The calculations don't account for any more complex tax deductions or credits for different groups of people, for example student loans, pensions or childcare.īut separate Sky News data analysis shows how young graduates now take home £1,200 less on average each month than they did before the pandemic after adjusting for inflation. Their income level means national insurance savings are limited but they are paying 20% in income tax on an additional £2,650 of earnings. That's because they benefit from the maximum amount of lower national insurance before falling into the high tax bracket.īut someone on £16,000 a year will pay £607 more in total - equivalent to more than three months of average household spending on food. Someone on a £50,000 salary is best off, by £752 a year - not far off what the average package holiday to Europe cost in 2023.