UK's Hunt announces new cuts to National Insurance for 27 million workers

The new cuts mean employees earning more than about 12,570 pounds ($15,943) a year will pay 8% in NICs on their earnings up to about 50,270 pounds, while self-employed workers pay 6%. ($1 = 0.7860 pounds)

British finance minister Jeremy Hunt on Wednesday said he would cut the rate of social security contributions paid by 27 millions workers for a second time in under four months before a national election expected later this year.

Hunt said the government would reduce National Insurance Contributions by 2 percentage points for employees and the self-employed, to help encourage people back to work and deliver a high wage, high skill economy. The latest cut, effective from April, would be worth about 450 pounds ($572) a year for an employee and 350 pounds for someone self-employed, he said.

"We need a simpler, fairer tax system that makes work pay," Hunt told parliament in his annual budget speech. In November, Hunt announced a 2 percentage-point cut to the main rate for employees and a 1 percentage-point cut for self-employed workers.

Taken together, Hunt said the tax cuts were worth 900 pounds to the average worker. The new cuts mean employees earning more than about 12,570 pounds ($15,943) a year will pay 8% in NICs on their earnings up to about 50,270 pounds, while self-employed workers pay 6%.

($1 = 0.7860 pounds)