Fears over a potential hike to National Insurance continue as yet another Labour minister has failed to ease concerns over a potential tax raid on Britain’s wealthiest.
Social Care Minister Stephen Kinnock was questioned this morning on whether people making more than £100,000 should expect to pay more to HM Revenue and Customs (HMRC).
Going into July’s General Election, both Prime Minster Keir Starmer and Chancellor Rachel Reeves promised Labour would not raise taxes on “working people”.
Ministers have cited this pledge covers income tax, VAT and National Insurance (NI), however anxiety has arisen over the prospect of the rate paid by employer NI contributions being hiked.
National Insurance is a tax paid by both employees and their bosses with the money being used to pay for pensions and benefits.
Currently, employers pay up to 13.8 per cent on employee earnings when it comes to NI contributions.
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Business owners are likely to be hit hardest by any National Insurance raid with Kinnock being the latest minister to sidestep the question of a potential rate increase.
During an interview on Sky News, he said: “I’m not going to get into speculation about the Budget. The Chancellor’s going to set it all out on October 30.
“We made it absolutely clear that we won’t be raising taxes on working people. The means VAT, National Insurance and income tax.
“We will not be breaking any of those manifesto commitments. The Chancellor will set it on October 30 so there’s not that long to wait.”
However, the minister was pushed on whether this pledge include Britons who are earning more than “six figures”.
Pressed on the issue, Kinnock said: “It’s absolutely clear. The definitions have to been in the round…It just would not be appropriate for me to speculate.
The Chancellor is expected to announce reforms to both inheritance tax (IHT) and capital gains tax (CGT) as part of a wider effort to plug the £22billion “black hole” in the public finances.
Changes to the tax system are expected to be part of the Autumn Budget
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Claire Blackburn, the head of tax at PwC UK, outlined why the National Insurance rate could be raised on those earning six figures or more.
She said: “Without breaking a manifesto promise not to increase taxes on working people, the Government has to find ways to increase Treasury income without increasing personal taxes, which is why during the Investment Summit this week it has been hinted this will come in the form of introducing NICs on employer pension contributions.
“Additionally, policy changes under consideration include carried interest and the treatment of non-doms, and likely moves on pensions, capital gains tax and inheritance tax.
“Executing policy change in one or all of these areas will need to be done in a way that acknowledges the risks of undermining stability.”
