[UK] Chancellor says it will take ‘many parliaments’ to scrap payroll tax

The UK chancellor has said that the Conservative Party will need multiple five-year parliamentary terms to fulfil its ambition of scrapping the national insurance payroll tax, SWI reports.

Speaking before parliament on March 13, Jeremy Hunt said, “I can’t give you a timescale because this is going to be the work of many parliaments.” 

The chancellor was reportedly addressing a parliament committee question about how soon he expected to achieve the goal he and Prime Minister Rishi Sunak set out during the spring budget earlier this month.

“There are two very clear conditions upon which the delivery of this ambition depends. One is that it won’t be funded by borrowing and the other is that it won’t be funded by cuts to public services,” he said.

The main rate of employee national insurance contributions was reduced to 8 per cent, from 12 per cent in the spring budget and in a mid-year fiscal update in November.

Conservatives might not have sufficient time to cut it further. It trails significantly behind the opposition Labour Party in opinion polls ahead of an election expected later this year.

Jonathan Ashworth - a Labour lawmaker representing the party on fiscal policy - spoke earlier on March 13 to say that ending national insurance would create a £46 billion hole in the Conservatives’ budget plans. Which, he said, “can only lead to higher borrowing, higher taxes on pensioners or the end of the state pension as we know it”.

Unlike income tax, national insurance is only charged on employment income, exempting income from savings, pensions and property. At present, employee national insurance contributions reportedly raise £71 billion a year, around 7 per cent of Britain’s total revenue.

The Conservative pledge comes as the overall tax burden remains on course to reach its highest level since World War II because thresholds for paying most taxes have failed to keep up with inflation.

Source: SWI

(Quotes via original reporting)

The UK chancellor has said that the Conservative Party will need multiple five-year parliamentary terms to fulfil its ambition of scrapping the national insurance payroll tax, SWI reports.

Speaking before parliament on March 13, Jeremy Hunt said, “I can’t give you a timescale because this is going to be the work of many parliaments.” 

The chancellor was reportedly addressing a parliament committee question about how soon he expected to achieve the goal he and Prime Minister Rishi Sunak set out during the spring budget earlier this month.

“There are two very clear conditions upon which the delivery of this ambition depends. One is that it won’t be funded by borrowing and the other is that it won’t be funded by cuts to public services,” he said.

The main rate of employee national insurance contributions was reduced to 8 per cent, from 12 per cent in the spring budget and in a mid-year fiscal update in November.

Conservatives might not have sufficient time to cut it further. It trails significantly behind the opposition Labour Party in opinion polls ahead of an election expected later this year.

Jonathan Ashworth - a Labour lawmaker representing the party on fiscal policy - spoke earlier on March 13 to say that ending national insurance would create a £46 billion hole in the Conservatives’ budget plans. Which, he said, “can only lead to higher borrowing, higher taxes on pensioners or the end of the state pension as we know it”.

Unlike income tax, national insurance is only charged on employment income, exempting income from savings, pensions and property. At present, employee national insurance contributions reportedly raise £71 billion a year, around 7 per cent of Britain’s total revenue.

The Conservative pledge comes as the overall tax burden remains on course to reach its highest level since World War II because thresholds for paying most taxes have failed to keep up with inflation.

Source: SWI

(Quotes via original reporting)