Employers NI raise confirmed by BBC?

hallmark

Until now the budget articles have tended to be based on either Govt kite-flying, i.e. deliberate leaks to gauge public reaction, or alarmist stories intended to whip up outrage and put the Govt off of raising certain taxes.

This article is different however. Although the BBC carefully avoids mentioning sources, this reads like it is confirmed policy and the BBC have been duly advised. There's probably going to be several of these before Wednesday, there usually is:

https://www.bbc.co.uk/news/articles/c9wrkngvyx4o

Baldytyke88

Instead of doing what Liz Truss did, not telling anyone what their plans were, they are informing the media of their plans so that any response by the markets is gradual.

hallmark

Are you suggesting that Liz Truss was in the wrong for sticking to the rules of parliament and that labour should be applauded for breaking them? That would be an unusual take.

masonic

The words "expected", "thought to be" put this article squarely in the speculation category. The government source is only quoted making a general statement about businesses helping out in the filling of the hole, which is deliberately vague. It is very likely that the article will be on the nose. I think we are all expecting this as one of the most likely measures, but the BBC is not claiming to know what is in the budget, just reporting on what is widely expected to happen.

As we have seen on this forum, people simply cannot help themselves in posting thread after thread of speculation, slowly zeroing in on what they believe are the most likely policies to be announced, so it is hardly surprising that the media is doing likewise.

The main reason for the reaction to the KamiKwasi budget was that it contained unfunded tax cuts and came with no impact assessment by the OBR.

Baldytyke88

hallmark said:

Are you suggesting that Liz Truss was in the wrong for sticking to the rules of parliament and that labour should be applauded for breaking them? That would be an unusual take.

Liz Truss didn't even have a budget, but a statement called a growth plan, which was the excuse for not having the OBR involved.

Albermarle

It is very likely that the article will be on the nose. I think we are all expecting this as one of the most likely measures

Especially when you read this in the article .

Any changes to the tax can be introduced quickly, within weeks of a Budget, through digitalised payroll systems, meaning revenues can also be generated at speed.

masonic

Albermarle said:

It is very likely that the article will be on the nose. I think we are all expecting this as one of the most likely measures

Especially when you read this in the article .

Any changes to the tax can be introduced quickly, within weeks of a Budget, through digitalised payroll systems, meaning revenues can also be generated at speed.

Employer NI rates went up to 15.05% in April 2022 and back down to 13.8% in November 2022, whereas employee rates have changed four times in the last few years, so that statement in italics will have plenty of supporting data. Could ultimately aim to transition NI to a tax levied only on the employer.

intalex

...although Reeves is not likely to introduce the levy to employers' pensions contributions.

This is surprising... objectively, this would be a more justifiable change, but optically, a straight increase to employers' NI rate may be perceived more favourably by "working people"... even if many employers will pass on these costs to employees either way...

dcs34

Baldytyke88 said:

Instead of doing what Liz Truss did, not telling anyone what their plans were, they are informing the media of their plans so that any response by the markets is gradual.

Yields on 10-year UK gilts have already risen to 4.25% - above the 4% level following the mini-budget which "crashed the economy". Does that mean Rachel Reeves has "crashed the economy"?

As far as the media is concerned all Labour have done this week is make it very clear they are having to shift the goalposts to re-define who "working people" are.

And then there's the allegations that the Chancellor hasn't been entirely honest when it comes to her CV...

zagfles

Didn't take long to blatantly break a manifesto promise. "...we will not increase National Insurance, the basic, higher, or additional rates of Income Tax, or VAT". Assuming this speculation is on the mark. 

masonic

zagfles said:

Didn't take long to blatantly break a manifesto promise. "...we will not increase National Insurance, the basic, higher, or additional rates of Income Tax, or VAT". Assuming this speculation is on the mark. 

They will be relying on the bit before the "...", namely "Labour will not increase taxes on working people, which is why...". Employer NI is not a tax on working people, even if employers decide to recover the cost through reduced wages or benefits. This was raised as a loophole in a similar deleted thread here before the speculation in the media got to it.