HMRC figures show employers paid £66.8 billion in national insurance contributions between April and October.
Chancellor Rachel Reeves (Image: Getty)
The Treasury raked in a record £67 billion from employers’ national insurance even before Rachel Reeves’s Budget tax raid.
The total of £66.8 billion between April and October was a jump of almost 6% from the £63 billion in the same period last year, figures from HM Revenue and Customs show.
In comparison, national insurance contributions paid be employees fell to £28 billion after the Tories slashed the rate twice during their final year in government.
Damon Hopkins at financial services consultancy Broadstone, said the figures show employers’ contributions already “far exceeding previous tax years and highlighting just how lucrative national insurance is likely to become for the Treasury”.
He added: “With the exception of very small businesses, these increased costs are likely to force businesses to review their approach to hiring, pay and benefits and perhaps even wider operating costs.
“Balancing these new cost pressures while supporting employees through what is still a fragile macroeconomic environment and without compromising retention or productivity will be a challenge.”
The main tax rise in Labour’s Budget last month was the hike in employers’ national insurance contributions, which is expected to raise more than £25 billion for the Treasury.
The Chancellor increased the rate employers pay from 13.8% to 15% and dropped the threshold at which the tax is paid from £9,100 per year to £5,000.
But the move has sparked a backlash from businesses, charities and the healthcare sector.
Sir Keir Starmer defended the move earlier this week after retailers warned it would inevitably lead to job losses.
Asked if it was a price that had to be paid to fix the foundations of the economy, the PM said: “We took a number of difficult decisions in the Budget and ensured that the pay slip in people’s pockets is not affected.
“They will not be paying more (in tax) and they’ll see that month or month in their pay slip.
“So far as the numbers affected it is important, I think, to factor in the protection that we put in place for employers, particularly small employers, so half of employers will either see no change to their NICs, or they’ll be paying less.”
He added: “We took difficult decisions. but fair decisions, to stabilise the economy, and to make sure that we could put ourselves in a position where we could make very important investments then into our NHS, into our schools and into housing.”
