Money expert Martin Lewis has issued his verdict on the first Autumn Budget from Labour Chancellor Rachel Reeves.
The Budget took in everything from DWP and HMRC changes to state pensioners, the Triple Lock, a fuel duty freeze and the end of the Personal Allowance freeze on Income Tax bands.
One announcement in particular caught Martin Lewis’ – about the change to employer’s National Insurance.
Labour had promised in its manifesto not to raise National Insurance but has appeared to get around this by declaring that they meant employee National Insurance, not employers.
In turn, Rachel Reeves announced an increase in NI paid by employers (effectively a tax paid on wages paid to the employee, payable by the employer) of 1.2 percentage points, to a new 15 percent rate.
But at the same time she also announced a change to the National Insurance thresholds too.
Reacting to the announcements, Martin Lewis said: “The change of threshold so employers now start paying National Insurance at £5,000 not £9,100 is big.
“For the employers who pay it, at the new 15% rate that alone’s £615 increased cost per most employees per year. The question is where will that money come from, profits, increasing charges or reducing salaries/benefits?”
In another piece of bad news, Martin added: “Bad) NEWS: Withing govt docs it says it will NOT shift child benefit to household income from individual income as previous govt had announced (and I and others had campaigned for).
“This is a shame and leaves inequity rife, bad news for single parent and single earner families. From 2025 employees will be able to pay the higher income child benefit charge through your tax code, and self assessment forms will be pre-populated with child benefit data.”
