Millions of workers to get an extra £104 as new tax rules come into effect in April

In addition to increasing the NICs threshold the Government will also end the freeze to working age benefits, which has been in place since 2016.

Millions of workers can expect to see a tax cut this year as rules for those in employment change.

Around 31 million people in full-time employment will be better off by £104 a year, while self-employed workers will see a lower tax cut of £78.

From 6 April, the threshold for National Insurance Contributions (NICs) will rise from £8,632 to £9,500, reports the Mirror.

Chancellor of the Exchequer Sajid Javid said: "We’re determined to do what we promised and put more money into the pockets of ordinary hard-working people. That’s why we’re starting this government as we mean to go on, by cutting their bills.

"We want everyone to feel that they can contribute to the new chapter we are opening for the economy and our country, because under this Government work will always pay."

All the other thresholds for 2020-21 will rise with inflation, except for the upper NICs thresholds which will remain frozen at £50,000, as announced at in the 2018 Budget speech.

The threshold changes will not affect low earners' entitlement to contributory benefits such as the State Pension, with the Lower Earnings Limit and Small Profits Threshold, above which individuals start building entitlement to contributory benefits, rising with the CPI measure of inflation.

Since 2010 the personal allowance, the level at which people start paying income tax, has risen from £6,475 to £12,500, an increase of over 90% in less than a decade.

The typical basic rate taxpayer now pays over £1,200 less income tax compared to 2010-11.

In addition to increasing the NICs threshold the Government will also end the freeze to working age benefits, which has been in place since 2016. From April 2020 the majority of working-age benefits will be uprated in line with inflation.