The Prime Minister has refused to rule out an increase in employer National Insurance contributions in the Budget.
During Prime Minister’s Questions earlier today, Rishi Sunak asked whether the government’s manifesto commitment to not increase taxes on “workers” applied to both employer and employee national insurance.
But the Prime Minister dodged the question. “We made an absolute commitment in relation to not raising tax on working people,” Keir Starmer replied.
Under current rules, employers do not pay national insurance on pension contributions they make for their employers as part of a salary sacrifice scheme.
While the tax break is designed to encourage pension savings, reports have suggested that Treasury officials are drawing up plans to scrap the relief.
Former pensions minister Steve Webb has said the move could bring in as much as £23.8bn every year, enough to plug the alleged £22bn blackhole in the public finances.
However, the comments will do little to reassure businesses ahead of the upcoming Budget. Survey after survey has pointed to deteriorating business confidence, with firms increasingly worried that taxes will rise.
A survey released today by the Institute for Chartered Accountants of England and Wales (ICAEW) showed that business sentiment fell for the first time in a year during September, largely due to concerns about tax.