Chancellor Rachel Reeves is set to bill British households and businesses an extra £36 billion as tax freezes and a rise in employers’ National Insurance take effect in the coming days. A rise in stamp duty is also set to dent Brits’ wallets as Ms Reeves prepares to deliver the Spring Statement on Wednesday, while businesses have called the tax raid one of “the most devastating in recent memory”.
Higher vehicle excise duty is expected to raise at least £400 million, with £250 million expected from charging a higher interest rate on overdue tax bills. Higher council tax rates will see £2 billion extra paid by households.
Kate Nicholls, chief executive of UKHospitality, said: “The additional annual costs being levelled upon hospitality businesses are among the most devastating in recent memory – hitting businesses and workers alike.
“Without urgent action in the Spring Statement, we will see hospitality businesses forced to cancel investment, reduce hours available for stuff, increase prices and, in the worst-case scenario, cut jobs.”
Andrew Griffith, the shadow business secretary, told the Telegraph: “There’s no amount of preparation to help anyone be ready for the £36 billion tidal wave of tax and similar increases breaking over the heads of businesses and households next week.
“This Government doesn’t understand that growth only comes from the productive private sector – not by taxing and regulating more.”
Mel Stride, the shadow chancellor, said: “Labour said they wouldn’t raise taxes for working people. They broke that promise. The Chancellor’s reckless tax rises are a ticking timebomb, and unless she takes immediate action in today’s emergency Budget, it’s businesses and hard-working families who will pay the price.”
The Telegraph said analysis of Treasury, OBR and HMRC documents shows that taxes due to go up next week will raise £36bn in the 2025-26 tax year alone.
The rises include a freezing of tax thresholds on income tax, while the rate of employer National Insurance is rising 13.8% to 15%, with that threshold lowered from £9,100 per year to just £5,000
Surveys from the Bank of England indicate more than half of bosses expect to employ fewer workers because of the increase, while more than 60% said they plan to raise their prices to offset some of the cost.
