Chancellor Rachel Reeves is expected to increase the national insurance (NI) rate for employers in her first Budget on 30 October, according to the BBC.
This is in part to boost funding for public services such as the NHS.
There is also an expectation that Reeves will use the Budget to lower the threshold for when employers start paying the tax. The two measures are estimated to raise around £20bn.
This announcement is predicted to be the single largest revenue raiser in the Budget, but other tax raises are anticipated.
Employers currently pay NI of 13.8% on a worker’s earnings above £175 a week.
A government source said: “There is a universal consensus that the NHS needs more money.
“That means asking businesses to help out. The choice is investment versus decline.”
NI contributions are the UK’s second-largest revenue stream behind income tax. It is paid by workers and the self-employed on earnings and profits, and by employers on top of the wages they pay out.
There has been a lot of speculation surrounding the Budget since Reeves announced in July the need to plug a reported £22bn black hole. She also vowed to “fix the foundations of our economy”.
This announcement was made in response to the findings of the Treasury’s internal audit of public finances.
The audit showed a £22bn gap between tax revenues coming in and expected spending.
She accused the previous government of “covering up the true state of the public finances”, although the Conservatives argue that she would have been aware of this before taking office.
The Labour manifesto pledged not to increase NI, income tax or VAT.
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