CashNews.co
LONDON (Reuters) – British finance minister Rachel Reeves declined to rule out raising the national insurance taxes that businesses pay, saying on Monday that a pre-election commitment not to raise the rate of social security contributions applied to workers.
Reeves is due to announce her first budget on Oct. 30 and she says she has to fill a 22 billion-pound hole in the public finances left behind by the previous government.
However, Reeves and Prime Minister Keir Starmer have ruled out raising the rates of income tax, national insurance and value added tax and they have committed to a freeze on corporation taxes for businesses.
Asked if companies might have to pay more in national insurance contributions, Reeves made clear that the pledge on the levy applied to workers, not businesses.
“We were really clear in our manifesto that we weren’t going to increase the key taxes paid by working people, income tax, national insurance and VAT, and on the business side our commitment that we would cap corporation tax at its current rate of 25%,” Reeves told reporters on the sidelines of a gathering of international investors and government officials in London.
“It says working people and then lists those three taxes paid by working people. We are going to stick to those manifesto commitments that we made, including the manifesto commitment for business on corporation tax.”
Reeves said stability was a precondition for attracting investment and speeding up economic growth. She reiterated that tax rises were necessary due to the strain on the public finances that the new government inherited.
“I’ve been really clear the first of our fiscal rules is that we will pay for day-to-day spending through tax receipts. At the moment we’re not on track to be able to do that by the end of the parliament because of that black hole,” she said. “And so decisions will need to be made.”
($1 = 0.7663 pounds)
(Reporting by Alistair Smout; Editing by William Schomberg)