PBR Could See NI Hike for Rich

The pre-Budget report could see higher earners face a hike in their national insurance contributions on top of a rise in income tax, according to BDO.

Those paying income tax at 40% already face the prospect of a higher 50% band being introduced in April next year, but they may also be hit with a higher NI rate as the government tries to boost tax take.

Stephen Herring, senior tax partner at BDO said that chancellor Alistair Darling is unlikely to introduce a jump in the basic rate of income tax or another rise in the higher rate, but would be “less surprised if he were to introduce further increases in national insurance, where he could increase the upper earnings limit or contribution rates”, reported Citywire.

Herring also predicted more restrictions on personal tax reliefs, anti-forestalling measures to stop companies bringing forward dividend and bonus payments before the 50% rate is introduced, and yet more anti-avoidance legislation on bonus structures.

Paul Grant - Accountancy Age 18-11-2009

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