Jan 27, 2022

Kwarteng: No U-Turn on National Insurance tax rise

Mel Stride, a Conservative MP and the committee chairman, told the BBC on Thursday that there was an "opportunity now to not go ahead with the National Insurance rise in April", and that he would prefer to see it delayed for a year. On Monday Conservative MP David Davis told the BBC Radio 4 Today programme that the policy was based on the "wrong data", adding that policy makers did not know that by April the UK would have the highest inflation for 30 years, or that interest rates, council tax, and fuel prices would be rising when formulating the policy. Under the plans, employees, employers and the self-employed will all pay 1.25p more in the pound for National Insurance from April 2022 for a year, when the extra tax will be collected as a new Health and Social Care Levy.The increase will see an employee on £20,000 a year pay an extra £130. People earning less than £9,564 a year, or £797 a month, don't have to pay National Insurance and won't have to pay the new levy. The government says the changes are expected to raise £12bn a year, which will go initially towards easing pressure on the NHS.A proportion will then be moved into social care system over the next three years.

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