The Global Payroll Association has raised concerns that Labour could increase National Insurance tomorrow for businesses in today’s Autumn Budget, which could result in pay freezes.
The association reckoned a 1% increase on employer contributions is likely, considering the party promised not to raise NI contributions for ‘working people’.
Melanie Pizzey, chief executive and founder of the Global Payroll Association, said: “The upcoming budget is going to be, as Labour themselves have confessed, painful for many to hear. It seems that big changes are on the horizon, and we’re not just talking about the big life moment taxes that have hit the headlines, such as Capital Gains and Inheritance Tax.
“The country faces a radical overhaul of tax contributions across the board and even if the proposed tax changes don’t directly affect you, you’re likely to feel the impact somewhere along the way.
“The prime example of this is, of course, an increase in National Insurance obligations for employers. As their outgoings increase, businesses are going to look for savings elsewhere and the unfortunate reality is that employees are ones who are likely to feel the pinch.
“Whilst pay cuts aren’t out of the question, a freeze on pay increases is the least they can expect in the short to medium term and, with inflation continuing to rise, this will inevitably result in a real term pay cut down the line.”
Council Tax
The GPA also noted that Prime Minister Keir Starmer hasn’t ruled out increasing council tax.
However, it said that, ‘to avoid creating absolute fury’, it’s likely Labour would only up the tax on the most valuable homes.
