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Check your next payslip – you could be due a £900 cash boost this year

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The new financial year has now begun (Picture: Getty Images)

The new financial year has now begun, and as finances remain tight, many households across the UK will be looking to save their pennies.

Now, HMRC has issued guidance on the payslip code that could tell you whether you’re due a £900 pay boost – and it applies from April 6.

As part of the Spring Budget, Chancellor Jeremy Hunt announced further cuts in National Insurance contributions from 10% to 8% in March. In January, the rate was reduced from 12% to 10%.

It’s positive news for those with the tax code 1257L, who will reap the benefits of the reductions. A worker earning £35,000 will save, on average, £900 in tax each year.

However, workers who haven’t yet reached the £12,570 threshold won’t be eligible for the £900 pay boost as they won’t have contributed enough to qualify for the tax refund.

‘As a result of this measure, an average employee on £35,400 will receive a tax cut of over £450 per year from April 2024,’ the government website clarifies.

Check your tax code (Picture: Getty Images)

‘An average self-employed person on £28,000 will see a tax cut of £310 a year and over 2 million individuals will benefit. Actual impacts for individual taxpayers will vary according to individual circumstances.’

As the Chancellor announced the policy in March, he noted that 27 million people would be eligible for the £900 cut, alongside 2 million self-employed people who will get a £650 cut when combined with the reductions from the autumn statement.

According to the Resolution Foundation, when this 2p cut to National Insurance sits alongside all the personal tax changes announced this parliament, people earning £27,000 to £59,000 will be better off overall.

Higher earners are expected to be worse off by £500, while someone on £16,000 will be the worst affected proportionally.

Talking on the BBC’s Sunday with Laura Kuenssberg at the time, Hunt said: ‘I do want, where it is possible to do so responsibly, to move towards a lower tax economy, and I hope to show a path in that direction.

‘This will be a prudent and responsible budget for long-term growth, tackling inflation, more investment, more jobs and that path to lower taxation as and when we can afford that.’

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