National insurance tax: Boris invited to cancel the increase “the Treasury has collected billions!” | United Kingdom | News

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The request comes as the Treasury took in more money from self-assessment tax returns last month compared to a year earlier. Tory MP John Redwood tweeted: ‘Today’s figures show the Treasury has collected several billion more in extra tax this year than expected so we can afford to cancel the [National Insurance] tax hike.”

Mr Redwood, writing for the conservative website Home, explained that the Treasury wanted to raise taxes to reduce government borrowing.

However, he added that with the Treasury estimating the deficit will reach £183billion, £50billion lower than expected, the government can ‘easily afford’ to reverse the £12billion increase. National Insurance next year and waive around £5 billion in VAT. income.

Mr Redwood, who represents Wokingham, said: “I have a strong economic reason why they need to do this. Why has the deficit come down a lot more than they thought it would this year? It’s because that the economy has grown more than they thought.

“It’s also because the Treasury/OBR [Office for Budget Responsibility] model of the economy underestimates how much additional tax revenue they will collect if the economy grows faster.

“Similarly, if they insist on slowing the economy too much this spring, they will reap less tax revenue than they thought. They could end up with a bigger deficit because of too much pressure.”

He warned that if busy consumers spend less on non-essentials, there will be less VAT and less jobs in the service sector, hence less income tax. Mr. Redwood also predicted that there will be less tax on the profits of non-energy companies.

He said: ‘I don’t want the government to fall into the trap of Treasury economic austerity again and plunge us into another downturn – which will lead to more self-defeating cries from the Treasury for higher taxes and a lower spending.”

Despite the increase in Treasury coffers announced on Tuesday, soaring inflation has driven interest payments on the public debt to their highest level since records began nearly 25 years ago.

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The RPI hit 7.8% in January, leading to interest payments of £6.1bn in January – the highest amount for that month since records began in April 1997.

That was £4.5billion more than the previous January, although down from the all-time high of £9billion in June last year.

In response to the ONS figures, Chancellor of the Exchequer Rishi Sunak said: “We have provided unprecedented support throughout the pandemic to protect families and businesses and it has worked, the Kingdom United had the fastest growing economy in the G7 last year.

“But our debt has increased significantly and there are new pressures on public finances, in particular due to rising inflation.

“Keeping public finances on a sustainable path is crucial so that we can continue to help the British people in times of need, without burdening future generations with high debt repayments.”

The Treasury said a one percentage point rise in inflation and interest rates would cost the government an additional £17.3billion next year in debt service charges.

He added that debt interest charges in January were £6.1billion – a record for the month – after the highest December debt interest charges on record last month.

The Prime Minister introduced what he described as a new health and social care tax in September that would see the rate of National Insurance payroll taxes paid by workers and employers rise by 1.25 percentage points . The same increase also applied to the tax on shareholder dividends.

The hike represents an attempt by the government to address a crisis in health and social care funding, but it has angered some Tories because it broke a 2019 election promise not to increase such levies to fund health care. social care.

Mr Johnson told MPs last year it would be irresponsible to face the costs of higher borrowing and debt.

He added: “I accept that this breaks a manifesto commitment, which I don’t do lightly, but a global pandemic was not in anyone’s manifesto.”

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