Tag Archives: National Insurance

Top Stores Tell Rachel Reeves Her Budget Will Cause ‘Inevitable’ Job Losses And Higher Prices

Posted on by
Reply

Some of Britain’s biggest businesses have warned Rachel Reeves that her Budget will lead to “inevitable” job losses and higher prices in the shops.

More than 70 retailers, including Greggs, Amazon UK, Tesco and Sainsbury’s, condemned the “sheer costs” associated with the chancellor’s decision to hike employers’ National Insurance.

It is estimated the move, which will see the NI rate increase and bring down the threshold at which it must be paid, will raise an extra £25,7 billion for the Treasury.

Reeves said it was necessary to help fill a £22 billion black hole in the public finances left by the previous Tory government.

But in a letter to the chancellor, organised by the British Retail Consortium, the firms said: “We appreciate government’s focus on improving the fiscal situation and investing in public services; we also recognise the role businesses have in supporting this.

“But, the sheer scale of new costs and the speed with which they occur create a cumulative burden that will make job losses inevitable, and higher prices a certainty.”

Other major companies who put their names to the letter included Aldi, Boots, Lidl, JD Sports, Primark and Morrisons.

A Treasury spokesperson said: “With our public services crumbling and an inherited £22bn fiscal black hole from the previous government, we had to make difficult choices to fix the foundations of the country and restore desperately needed economic stability to allow businesses to thrive.

“By doing this, more than half of employers will either see a cut or no change in their National Insurance bills, there will be £22.6bn more for the NHS and workers’ payslips will be protected from higher tax.

“This government is committed to delivering economic growth by boosting investment and rebuilding Britain.”

The business backlash comes as farmers prepare to protest in Westminster at changes to inheritance tax which they say will cost them millions of pounds and put many out of business.

However, the chancellor has insisted there will be no U-turn on the policy, telling them: “The reforms to agricultural property relief ensure that wealthier estates and the most valuable farms pay their fair share to invest in our schools and health services that farmers and families in rural communities rely on.”

Share Button

Labour’s Tax Rises Will ‘Largely’ Fall On Working People, Leading Economists Say

Posted on by
Reply

Working people will end up paying for Rachel Reeves’ huge tax hike, according to a leading think tank.

The chancellor unveiled a plan to raise a record-breaking £40bn in her Budget today, but maintained that she had stuck to her promise not to bring back austerity.

Labour also claims to have honoured their manifesto pledge not to increase taxes for “working people”.

Although that exact definition is still not clear, the government said they would not put up the income tax, VAT or National Insurance that they pay.

However, Reeves did raise the NI rate paid by for employers to 15% from April next year.

According to the Office for Budget Responsibility, three-quarters of the impact of that will be felt by employees through lower wage rises.

Institute for Fiscal Studies (IFS) director Paul Johnson said: “Somebody will pay for the higher taxes – largely working people.”

Johnson also issued a warning about the way the chancellor had “front-loaded” the government’s spending plans over the next five years.

“A government splashing the cash in the short term and promising to be more austere in future? Stop me if you think you’ve heard this one before,” he said.

He added: “The challenge will be to make sure the money is spent well enough to make those costs worth bearing.”

Accountancy outsourcing specialists Advancetrack said the increase to employers’ NICs is a “big blow to UK businesses of all sizes who are already grappling with a range of escalating costs”.

Meanwhile, accountancy firm Menzies LLP warned that this Budget was focused on “quick fixes rather than meaningful reform”.

European Movement UK CEO and former Lib Dem minister, Sir Nick Harvey, suggested there was something missing from the Budget: Brexit.

“The chancellor can tinker around the edges, but addressing the economic damage done by Brexit must become a priority,” he said.

Social mobility charity Sutton Trust thought it was educational support that was lacking from the Budget, saying: “The government has clearly identified the need to increase the national minimum wage due to cost of living pressures, so why does student maintenance remain inadequate?”

Meanwhile, Generation Rent’s chief executive Ben Twomey said: “The lack of clear support for the half of renters who don’t have savings and are really struggling is a big concern.”

Resolution Foundation’s interim chief executive Mike Brewer said the Budget engages with the country’s economic challenges – but it’s only the “first step of what will be needed”.

Share Button

Unearthed Video Of Rachel Reeves Laying Into Tory Tax Hike Returns To Haunt Her Ahead Of Budget

Posted on by
Reply

An unearthed video of Rachel Reeves laying into the Tories for putting up National Insurance has come back to haunt the chancellor.

She and Keir Starmer have both repeatedly refused to rule out increasing the NI rate paid by employers in the forthcoming Budget.

But speaking in the Commons in 2021, Reeves, who was then shadow chancellor, said: “It is so worrying that at this crucial time, the prime minister and chancellor concocted a new jobs tax to arrive in the spring.

“Despite all of their election promises to cut National Insurance contributions, they’re actually raising them against the strong advice of business and trades unions.

“The Conservative government’s actions will make each new recruit more expensive and increase the costs to business.

“The decision to saddle employers and workers with a job tax takes money out of people’s pockets when our economic recovery is not yet established or secure, and only adds to the pressure on businesses after a testing year and a half.”

Labour’s election manifesto said: ”[We] will not increase taxes on working people, which is why we will not increase National Insurance, the basic, higher, or additional rates of income tax, or VAT.”

However, speaking on Monday, Reeves insisted that putting up the employers’ rate of NI would not break that pledge.

She said: “We are going to need to sort of close that gap between what government is spending and bringing in through tax receipts. But we are going to be a government that sticks to our manifesto commitments, including that one.”

Asked directly on Monday whether it would break the manifesto promise, the prime minister told the BBC: “It was very clear from the manifesto that what we were saying was we’re not going to raise tax for working people. And it wasn’t just the manifesto, we said it repeatedly in the campaign, and we intend to keep the promises that we made in our manifesto.”

Meanwhile, the chancellor today dropped another huge hint that taxes will rise in the Budget on October 30.

She told a cabinet meeting that “there would have to be difficult decisions on spending, welfare, and tax”.

A Labour spokesperson said: “The chancellor told cabinet the Budget would focus on putting the public finances on a strong footing and being honest with the British people about the scale of the challenge.”

Share Button

Pay For Social Care With Extra £300 Tax Bill For Over-50s, Suggests Damian Green

Posted on by
Reply

HuffPost is part of Oath. Oath and our partners need your consent to access your device and use your data (including location) to understand your interests, and provide and measure personalised ads. Oath will also provide you with personalised ads on partner products. Learn more.

Select ‘OK’ to continue and allow Oath and our partners to use your data, or select ‘Manage options’ to view your choices.

Share Button