Sunak hints at further cuts to national insurance in spring budget

Rishi Sunak has strongly hinted that next week’s budget could see further cuts to national insurance rates.

The Prime Minister told reporters at the Scottish Conservatives conference in Aberdeen on Friday that he wanted to make life easier for working-class people across the UK, especially after the SNP government increased income tax for all earners in Scotland from April. occasion. Over £28,850.

“I’m very clear that while the SNP are making life harder for hard-working people by raising taxes, I want to make people’s lives easier,” Sunak said just months after the government cut national insurance contributions. workers across the UK – rising from 12% to 10% in January.

Sunak added that the reduction in NICs “is a significant tax cut worth £450 for someone earning an average income of £35,000”. “I believe in a country and a society where hard work will be rewarded. This is very important to me.”

Sunak said Scottish minister Alister Jack had been urging chancellor Jeremy Hunt to make another cut to the NIC in next week’s budget. “It is for the reasons stated above that I strongly emphasize that this is national insurance, not income tax,” Jack said.

There has been speculation for weeks that Mr Hunt could announce personal tax cuts in next week’s spring budget. Sunak’s comments are the first strong hint that the move could come in the form of further cuts to national insurance rather than a penny or two penny cut in the basic rate of income tax.

However, tight fiscal forecasts over the past week have left Hunt with a much narrower range of giveaways, instead considering unexpected tax rises such as emulating Labour’s idea of ​​scrapping non-resident status, which provides for those who live in the UK but do not Provide tax relief. Claim that their permanent residence (“domicile”) is abroad.

On Saturday, Hunt took fresh action to try to drum up support for British businesses and revive the country’s stock market by forcing pension funds to reveal how much money they have invested in British and overseas companies.

Treasury said the proposed policy would help employers compare plans and make informed choices about where to store and grow cash. They said it would also focus the attention of pension administrators on “ensuring good returns for savers”.

“UK pension funds appear to contribute less to the UK economy than their international peers because they invest less in our domestic businesses,” Hunt said. “These requirements will help focus attention on how to improve overall returns for savers and On the results.”

The Treasury did not confirm whether new pension fund disclosure rules would expand investment in the country’s infrastructure program, which the government is also trying to encourage. City regulators are expected to launch consultations on the proposals later this spring.

A few weeks ago, Hunt hinted that he might launch a UK Isa that would give savers the chance to buy a set number of shares in British companies without paying tax, to further stimulate interest in the London stock market.

Currently, the government imposes a 0.5% tax on any shares purchased in the UK, known as share purchase stamp duty.