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NI increase to be scrapped

ended 22. September 2022

A 1.25% rise in National Insurance will be reversed from 6 November and the government will axe a planned tax rise to fund health and social care, the Chancellor has just announced. The Chancellor claims the reversal will deliver on Liz Truss’s pledge to cut taxes to stimulate growth. Any thoughts, send them across. Deadline is ASAP.

7 responses from the Newspage community

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Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
This is the right thing to do by the chancellor but health and social care do still need funding. I would like to see this from general taxation in a more progressive manor than slapping a tax on recruiting staff and paying their wages.
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Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
This is the right thing to do by the chancellor but health and social care do still need funding. I would like to see this from general taxation in a more progressive manor than slapping a tax on recruiting staff and paying their wages.
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Scott Gallacher
Director at Rowley Turton
It's excellent news for hard-working families that the NI rise has been reserved. Given the Cost of Living crisis, people need all the help the government can give. However, this was announced on the same day the Bank of England increased interest rates. Hitting many of those same people with higher mortgage payments. It is too much to ask for some joined-up thinking from those in charge of the nation's economy?
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Anil Mistry
Director and Mortgage Broker at RNR Mortgage Solutions
This £330 pay rise, which is what it amounts to, will go down well with the countless households that are under serious financial pressure. However, it means less revenue for the Government and more potential borrowing. That translates into increased debt for the country, which will need to be paid back one day. Gordon Brown once borrowed too much, then look what happened.
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Keith Hood
Mortgage and Protection advisor at Warners Financial Services
A tax cut of any kind sounds welcome, but it comes at a cost. The increase in National Insurance was intended to fund desperately needed social care. This is absolutely crucial for the NHS, which as we all know, is at breaking point already. It will appease the Tory voters and backbenchers, who will love a tax cut, that is until they try to visit A&E.
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Graham Cox
Director at Bridging Hub
Scrapping the 1.25% National Insurance tax rise will provide some welcome relief from the surge in the cost of living, as well as drive growth. I always thought Sunak introducing the increase in April was a huge mistake, given what was so clearly coming down the pipe. It's important the health and social care deficit is funded eventually, because it will cause huge problems down the road otherwise.
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Alastair Hoyne
CEO, Finanze Capital at Finanze Capital
Reversing Sunak's 15.05% hike in National Insurance in April is designed for high-income earners to benefit from such tax cut. In particular, UK employers will now get away with shouldering almost £9 billion in contributions, so this will relieve them at a crucial period when the country is taming severe runaway inflation. The financial strain brought by surging energy prices in the country has brought headline inflation to excessive levels in more than 40 years. Tax cuts, especially for the wealthy, are thought to spur private economic activity, which contributes to robust growth. The higher net income causes savings to rise in the short run. And because the rich can save more than the poor, such wealth is channeled into the banking sector, which can then lend more to households. Of course, such an assumption isn’t always welcomed by those against fiscal measures that favour the rich. However, we believe that this will likely translate to growth in domestic consumption and investment under favourable circumstances.