In an interview with BBC Breakfast, Sir Keir Starmer has not ruled out the possibility of an increase in National Insurance for employers in the upcoming Budget. The Labour Party had previously stated in their 2024 manifesto that they would not increase National Insurance, income tax, or VAT. However, speculation has been growing that the rate of National Insurance paid by employers could go up to fill a £22bn “black hole” in the nation’s finances.
Sir Keir stated that the party had been “very clear in the manifesto that we wouldn’t be increasing tax on working people,” but did not comment specifically on employers’ National Insurance. Currently, employers pay National Insurance at a rate of 13.8% on all employees’ earnings above £175 per week. Rates also apply to employees who earn over £242 a week or have profits of more than £12,570 a year.
The prime minister has refused to comment on budget speculation before the official announcement in a fortnight. However, Downing Street has not ruled out the possibility of an increase in employer National Insurance, leading to speculation about how this would affect the economy, particularly as the government is attempting to make the UK a better environment for business investment. The government has also released £68m to prepare brownfield land for new housing, as part of their commitment to building 1.5 million homes over the next five years.
Labour’s previous election pledge not to increase National Insurance for “working people” related to the employee element, rather than the sum paid by employers. Treasury officials have reportedly been exploring the possibility of raising revenue through National Insurance on employer pension contributions. The Institute for Fiscal Studies (IFS) has estimated that introducing National Insurance at the full 13.8% rate on employer pension contributions could raise up to £17bn a year for the exchequer
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