Chancellor Rachel Reeves faces pressure to raise taxes in her upcoming budget announcement despite her commitment to one major fiscal event per year. The Spring Statement on March 26 will unveil the Office for Budget Responsibility's forecast, likely indicating lower growth projections, which may compel Reeves to increase tax revenues amidst existing spending cuts. This poses a significant challenge to UK businesses, particularly in retail and hospitality, already burdened by increased National Insurance Contributions. There is some hope for relief, particularly regarding the threshold for NIC.
Rachel Reeves said in December, she 'remained committed to one major fiscal event a year', but the OBR's Economic and Fiscal Forecast might force further tax rises.
While it seems certain that the employers NIC rate will increase to 15%, a reversal of all or part of the reduction in the threshold at which employers pay NIC would be hugely welcomed.
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