A senior Labour minister has indicated a hike to National Insurance is on the cards despite Prime Minister Keir Starmer’s pledge to not raise the tax burden for “working people”.
Earlier today, Business Secretary Jonathan Reynolds confirmed his party’s electoral promise was “specifically in the manifesto, a reference to employees”.
National Insurance contributions are a HM Revenue and Customs (HMRC) levy which are paid both by workers and business owners.
Ahead of Chancellor Rachel Reeves’ Autumn Budget on October 30, speculation has been rife over whether the Prime Minister’s pledge to not raise taxes included both of these charges.
During PMQs earlier this week, Starmer was unable to explicitly rule out future tax hikes on employers when questioned by his predecessor Rishi Sunak.
While speaking to Sky News, Reynolds gave the clearest indication yet that Labour could be implementing an increase to the rate paid by bosses on National Insurance contributions.
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Business could pay more tax this year if Reeves raises National Insurance on employers
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On the Chancellor’s plans for National Insurance, the Government minister shared: “You know that pledge was taxes on working people.
“There’s a lot already in the manifesto, but you have to wait for the detail of a Budget… this will be a Budget for growth.”
Appearing on the same show, Shadow Work and Pensions Secretary Mel Stride described the idea of raising employer National Insurance as a “tax on jobs”.
Stride added: “What they should be about is growth and increasing productivity.”
As it stands, the rate paid on National Insurance by employees is eight per cent following two rate reductions earlier this year.
Based on the last Conservative Government’s figures, 27 million workers saved around £900 as a result of Chancellor Jeremy Hunt slashing National Insurance on workers.
Under the last Conservative Government, the former Chancellor Jeremy Hunt claimed his party had saved the average worker on £35,000 around £900
Britons who are self-employed pay class 4 National Insurance contributions at a rate of six per cent if they earn between £12,570 and £50,270.
Chancellor Rachel Reeves will outline the Government’s fiscal agenda on October 30
GB News
Employers have to pay a 13.8 per cent contribution on any worker earnings surpassing the second threshold on average.
Currently, this threshold is sitting at £175 per week or £758 a month.
When asked about the rumoured hike to National Insurance contributions, the Chancellor said: “Our manifesto was very clear: we will not raise taxes on working people.
“That means their National Insurance, basis/high/additional rates of income tax and VAT. Those stand.”
