Why does Sunak's £900 tax cut claim keep getting fact-checked?

Claims by Rishi Sunak about tax cuts have been labelled false on social media four times in four days, as the prime minister promotes his National Insurance reduction.

The PM has been repeatedly posting on X about a 2pm cut to National Insurance, announced earlier this year, which he says will save the average earner £900 a year after the changes hit payslips this week.

But X's Community Notes feature, which targets potentially misleading posts by adding context underneath them, has repeatedly refuted the claim.

The feature said the claim of a £900 saving is "only a partial picture".

Quoting fact-checkers Full Fact, Community Notes said this week's change would allow the average worker, earning approximately £35,000, to "save only about £340 a year".

It added people earning less than £26,000 "will be worse off" thanks to the government's taxation policies.

Why is Rishi Sunak being fact-checked?

It's a little complicated, but the discrepancies can be explained by fiscal drag and a combining of tax cuts.

Mr Sunak's claim of a £900 saving this year comes from combining two cuts to National Insurance of 2p. The first hit payslips at the start of 2024 and the second on April 30.

People earning £35,000 would pay £450 less in National Insurance for each cut.

But critics say the prime minister's wording has inflated the saving taking effect this week.

In two posts, he wrote: "Our second National Insurance cut hits payslips next week. It's worth £900 to someone earning the UK average salary."

A Downing Street source said it was "clear he was talking about our combined tax cut of £900 for the average worker this year alone".

But that does not explain fiscal drag, which brings the overall tax saving down for the average worker.

So how much will workers save? And what's fiscal drag?

The Institute for Fiscal Studies says the average earner will actually save £340 from each cut, rather than £450, thanks to fiscal drag.

Many tax thresholds, which separate how much people in different tax brackets pay, are currently frozen - rather than rising in line with inflation.

It means many people are pulled into a higher tax bracket when they get a pay rise, and pay out more of their earnings as a result - this is known as fiscal drag.

The IFS said the National Insurance cuts "just serve to give back a portion of the money that is being taken away" through other tax changes, "in particular, multi-year freezes to tax thresholds at a time of high inflation".

It added: "Overall, for every £1 given back to workers (including the self-employed) by the NICs (National Insurance contributions) cuts, £1.30 will have been taken away due to threshold changes between 2021 and 2024, with this rising to £1.90 in 2027."

But, because of different tax brackets, the savings vary.

The IFS said anyone earning between about £26,000 and £60,000 per year will be "better off".

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But those earning between around £12,500 (the level at which people begin paying National Insurance and income tax) and £26,000 will be "worse off, because the cuts to NICs rates are more than offset by other tax rises".

The prime minister has previously said it is his ambition to abolish National Insurance entirely, one day. But Labour has said that would leave a £46 billion blackhole in the country's finances.

A Downing Street source said: "The Conservatives will go further to end the double tax on work when economic circumstances allow which is in sharp contrast to the Labour party who will raise your taxes to pay for their unfunded 2030 green spending spree.”