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Gov ‘should rethink assault on taxpayers’ with proposed NI hike

The TaxPayers’ Alliance has blasted minsters’ proposal of an increase in national insurance contributions for employees.

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The TaxPayers’ Alliance has criticised the government’s proposal to increase national insurance (NI) contributions to fund social care, calling it an “assault on taxpayers”.

 

According to the Guardian, ministers are considering a hike in national insurance, which has been described as a social care and health levy, in order to overhaul the UK’s social care system.

 

Prime Minister Boris Johnson has not reasserted his promise not to raise income tax or NI when asked about the plans for tax increases at a Downing Street press conference held earlier this week.

 

However, chancellor Rishi Sunak is believed to have been clear that any potential tax rise must be agreed and announced at the same time as the new policy on care costs.

 

Estimations made by the Resolution Foundation stated that increasing NI by 1p for employees and the self-employed could raise around £6bn a year.

 

Responding to the proposal, John O’Connell, chief executive of the TaxPayers’ Alliance, said that to fund social care, a more sustainable solution is necessary.

 

He continued: “Funding social care requires a more sustainable solution than simply whacking up taxes on working people and businesses.”

 

O’Connell also warned that when ministers earmark tax proceeds for spending on specific areas, it is usually “smoke and mirrors”.

 

“What’s more, when politicians earmark tax proceeds for specific items of spending, it is usually smoke and mirrors. National insurance itself is little more than just another income tax, with receipts used for day-to-day spending and quite often wasted,” he added.

 

“The government should rethink this assault on taxpayers and look for a long-term funding model.”

 

The Treasury and sources at No 10 have said that there is no timeframe for the proposal, which has been expected to be announced this week. Instead, it has been stated that a plan would be set out by the end of the year.

 

Torsten Bell, chief executive of the Resolution Foundation, echoed similar feelings felt by O’Connell, who explained: “Tax rises will be needed to deliver decent social care, but a national insurance rise is a terrible way to raise the funds required. It’s a tax disproportionately loaded on to younger and lower-paid workers, compared to a fairer rise in income tax,” reported the Guardian.

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