Latest news with #nationalInsurance
Times
10-07-2025
- Business
- Times
Consumers will pay for national insurance rises, employers say
Employers are planning to raise prices for consumers in order to deal with the higher payroll taxes, raising concerns about persistently high inflation, a survey has found. A closely watched measure of business sentiment in the UK compiled by S&P Global found that just under 50 per cent of firms surveyed said they would absorb the rise in national insurance tax this year by passing on the cost to consumers. Some 36 per cent said they would reduce headcount in response and only 9 per cent said they were planning to cut wages as a result of the NICs change, which came into force from April this year. The findings will concern the Bank of England, which is monitoring how firms react to climbing payroll costs as it decides how far and fast to cut interest rates. If taxes are passed through to consumers, this risks inflation staying above the central bank's 2 per cent target.
Yahoo
09-07-2025
- Business
- Yahoo
Starmer refuses to rule out wealth tax
Sir Keir Starmer has refused to rule out a wealth tax or say if he would extend a freeze on income tax and national insurance thresholds. Asked twice during Prime Minister's Questions if he could rule out a tax on the wealthiest, Sir Keir sidestepped the questions. Conservative leader Kemi Badenoch said he was "flirting with Neil Kinnock's demand for a wealth tax" after the former Labour leader called for one on Sky News' . Politics latest: Sir Keir dodged the question by saying his government has stabilised the economy, but was asked again by Green Party co-leader Adrian Ramsay if he would stand by his promise that "those with the broadest shoulders should carry the largest burden". The PM simply said: "We can't just tax our way to growth." Earlier this week, ministers and to rule out a wealth tax. PM dodges threshold freeze question The prime minister also avoided Ms Badenoch's questions about whether he would lift a freeze on income tax and national insurance thresholds. In her first budget last autumn, Chancellor Rachel Reeves said Labour would keep the thresholds frozen until 2028-29 = to when the Conservatives had frozen them to. But she said, after that, they would be uprated in line with inflation. Asked if that still stands, Sir Keir said Labour would "stick to our manifesto commitments". However, freezing thresholds was not in the party's manifesto. Freezing thresholds leads to fiscal drag, where more people pay higher levels of income tax because they are dragged into higher tax thresholds as their pay increases. Ms Reeves previously said, at the budget: "Extending the threshold freeze would hurt working people." Read more: PM will not raise income tax Sir Keir did confirm he would not raise income tax, national insurance or VAT. When asked by Ms Badenoch if he stood by his manifesto promise to not increase them, he said: "Yes." He also said the party is "absolutely fixed on our fiscal rules". This will make it difficult to raise more cash for public services - something the government desperately needs after a series of blistering U-turns that have resulted in savings being wiped out. The welfare bill went through last week but was so heavily watered down after dozens of Labour MPs threatened to rebel, it will no longer save the projected £5.5bn a year by 2030. At the beginning of June, Labour also largely reversed its cuts to winter fuel payments. It means instead of saving £1.4bn in 2024-25, rising to £1.5bn this year - the savings will only amount to £500m a year.
Sky News
09-07-2025
- Business
- Sky News
Starmer refuses to rule out wealth tax
Sir Keir Starmer has refused to rule out a wealth tax or say if he would extend a freeze on income tax and national insurance thresholds. Asked twice during Prime Minister's Questions if he could rule out a tax on the wealthiest, Sir Keir sidestepped the questions. Conservative leader Kemi Badenoch said he was "flirting with Neil Kinnock's demand for a wealth tax" after the former Labour leader called for one on Sky News' Sunday Morning With Trevor Phillips. 2:19 Sir Keir dodged the question by saying his government has stabilised the economy, but was asked again by Green Party co-leader Adrian Ramsay if he would stand by his promise that "those with the broadest shoulders should carry the largest burden". The PM simply said: "We can't just tax our way to growth." Earlier this week, ministers and Sir Keir's spokesman also refused to rule out a wealth tax. 1:51 PM dodges threshold freeze question The prime minister also avoided Ms Badenoch's questions about whether he would lift a freeze on income tax and national insurance thresholds. In her first budget last autumn, Chancellor Rachel Reeves said Labour would keep the thresholds frozen until 2028-29 = to when the Conservatives had frozen them to. But she said, after that, they would be uprated in line with inflation. Asked if that still stands, Sir Keir said Labour would "stick to our manifesto commitments". However, freezing thresholds was not in the party's manifesto. Freezing thresholds leads to fiscal drag, where more people pay higher levels of income tax because they are dragged into higher tax thresholds as their pay increases. Ms Reeves previously said, at the budget: "Extending the threshold freeze would hurt working people." PM will not raise income tax Sir Keir did confirm he would not raise income tax, national insurance or VAT. When asked by Ms Badenoch if he stood by his manifesto promise to not increase them, he said: "Yes." He also said the party is "absolutely fixed on our fiscal rules". This will make it difficult to raise more cash for public services - something the government desperately needs after a series of blistering U-turns that have resulted in savings being wiped out. The welfare bill went through last week but was so heavily watered down after dozens of Labour MPs threatened to rebel, it will no longer save the projected £5.5bn a year by 2030. At the beginning of June, Labour also largely reversed its cuts to winter fuel payments. It means instead of saving £1.4bn in 2024-25, rising to £1.5bn this year - the savings will only amount to £500m a year.
Yahoo
10-06-2025
- Business
- Yahoo
Jobless rate surges to highest since 2021 while pay growth eases sharply
Britain jobless rate surged to its highest level for nearly four years and pay growth for UK workers eased by more than expected as employers faced surging staff costs, official figures have shown. The Office for National Statistics (ONS) said average regular earnings, excluding bonuses, fell sharply to 5.2% in the three months to April, from 5.5% in the previous three months and the lowest since the third quarter of last year. While this is still outstripping inflation, up by 2.1% with Consumer Prices Index inflation taken into account, it was lower than predicted, with most experts pencilling in a fall to 5.3%. The rate of unemployment also jumped to 4.6% in the three months to April, up from 4.5% in the three months to March and the highest level since the three months to July 2021. The figures also showed vacancies tumbled by 63,000 to 736,000 in the three months to May, while payroll data revealed the biggest drop for five years last month, down 109,000 to 30.2 million. It coincided with firms facing a hike in national insurance contributions in April, which had been announced in October's budget. Liz McKeown, ONS director of economic statistics, said: 'There continues to be weakening in the labour market, with the number of people on payroll falling notably. 'Feedback from our vacancies survey suggests some firms may be holding back from recruiting new workers or replacing people when they move on.'
Yahoo
10-06-2025
- Business
- Yahoo
Jobless rate surges to highest since 2021 while pay growth eases sharply
Britain jobless rate surged to its highest level for nearly four years and pay growth for UK workers eased by more than expected as employers faced surging staff costs, official figures have shown. The Office for National Statistics (ONS) said average regular earnings, excluding bonuses, fell sharply to 5.2% in the three months to April, from 5.5% in the previous three months and the lowest since the third quarter of last year. While this is still outstripping inflation, up by 2.1% with Consumer Prices Index inflation taken into account, it was lower than predicted, with most experts pencilling in a fall to 5.3%. The rate of unemployment also jumped to 4.6% in the three months to April, up from 4.5% in the three months to March and the highest level since the three months to July 2021. The figures also showed vacancies tumbled by 63,000 to 736,000 in the three months to May, while payroll data revealed the biggest drop for five years last month, down 109,000 to 30.2 million. It coincided with firms facing a hike in national insurance contributions in April, which had been announced in October's budget. Liz McKeown, ONS director of economic statistics, said: 'There continues to be weakening in the labour market, with the number of people on payroll falling notably. 'Feedback from our vacancies survey suggests some firms may be holding back from recruiting new workers or replacing people when they move on.'
