Brits will pay 1p less income tax under government plans unveiled today.
The measure was announced by chancellor Rishi Sunak in his Spring Statement.
The change to the basic rate of income tax will kick in from April 2024.
The basic rate is currently 20p, and this will drop to 19p.
The way income tax works is you pay nothing on earnings of up to £12,570 a year.
Are today's announcements enough to support struggling families? Let us know: mirror.money.saving@mirror.co.uk
You then pay 20p on every £1 you earn between £12,571 and £50,270 a year.
This is known as the 'basic rate' of income tax, and it is this that Sunak is cutting by 1p.
Sunak told MPs today: "For the first time in sixteen years, the basic rate of income tax will be cut from 20 to 19 pence in the pound.
"A tax cut for workers, for pensioners, for savers. A £5billion tax cut for over 30 million people.
"It is fully costed and fully paid for in the plans announced today."
Around 26.9million people in the UK, or 83.3%, paid the basic rate of income tax in 2020/1, according to government figures.
Someone earning £30,000 a year currently pays £3,486 a year in income tax, and this would fall by around £175 under Sunak's proposals.
People earning between £50,271 and £150,000 pay 40p per £1 earned, and 45p per £1 on their income above £150,000.
Tim Walford-Fitzgerald, of accountancy firm HW Fisher, said: "Dropping the one penny from the basic rate of income tax is a tactical and political move from the chancellor.
"Assuming it comes into effect from April 2024, the first payslip you will see this in will arrive at the same time as election leaflets ahead of the next planned General Election in May 2024 - a coincidence, or a well-planned strategy?”
It is not confirmed where the chancellor will find the cash to knock 1p off income tax rates.
The chancellor currently believes he has £31.6billion to spend in 2024/5, when the income tax cut is meant to happen.
But this can be knocked out easily by changes to the economic outlook.
For example, the recent rise in Bank of England base rate has wiped out £13billion from government funds within months.
As Sunak delivered his Spring Statement, Labour MPs were not impressed.
One shouted "is that it?" as the chancellor delivered an underwhelming package to help struggling families.
One of the better measures included an extra £500million for families in poverty, and a National Insurance cut that will save low income workers £330 a year.
For only the second time in 20 years fuel duty will be cut by 5p a litre and the Chancellor said inflation is forecast to hit 7.4% this year.
The "mini-budget" comes at a time when hard-pressed families are facing severe strain, with rising energy prices and high inflation piling on the misery.
This morning inflation hit a 30-year high of 6.2% amid warnings it could soar even higher later in the year.
