HIKE in National Insurance contributions is set to cost Brits an extra £255 a year in tax.
Increase, scheduled to launch in April this year, risks spiking inflation with rising costs of living and skyrocketing household bills.
The plan to increase 1.25 percentage points applies to all employers – with fears consumers will be left with increased bills.
According to The Telegraph, the Treasury committee said in its report: “The Office of Budget Responsibility forecast states that the policy combination chosen by Prime Minister at this level the Budget will act as an inflation promoter.
“And it specifically identified the increase in employers’ National Insurance Contributions, (NIC) and the massive fiscal easing that took place in the Spending Review.”
The committee, chaired by Mel Stride, a Tory MP and former Finance Minister, has warned Boris Johnson and Rishi Sunak that a rate hike could force the Bank of England to raise rates once again.
And in his Budget report last October, Mr Johnson was warned that the pay rise risked a “wage price spiral”.
The report added: “In his speech, the Prime Minister made it clear that he is wary of financial risks.
Higher inflation and higher interest rates become entrenched.
“Treasury should put these risks at the forefront of their minds when designing policies at future fiscal events.
“The prime minister announced his ambition to cut taxes before parliament ended. In October, there was not much room for maneuver, but there has been positive news from public finances since then.
“While further good news could help him achieve this ambition, significant risks remain, most notably from the impact of inflation.”
https://www.thesun.co.uk/money/17454188/brit-workers-pay-extra-taxes-nic/ British workers will have to pay an extra £255 a year in tax and face increased costs if national insurance is increased