Overview
- Multiple outlets report the chancellor has told the OBR that an income tax rise is among the major measures under preparation, with a leading option of a 2p income tax increase paired with a 2p cut to employee National Insurance for earnings up to about £50,270, raising roughly £6bn a year.
- Analysts say the swap would shift more of the burden to groups not paying NI, with pensioners and landlords facing higher bills, and wealth managers estimate extra annual tax of about £495 at £75,000 income, £995 at £100,000 and £1,745 at £125,000.
- The Bank of England reports weaker consumer spending, investment and hiring ahead of the Budget, with business contacts delaying plans and surveys pointing to a chilled housing market; ITV flagged a sharp drop in fourth‑quarter advertising revenue.
- The plan would breach Labour’s 2024 pledge not to raise income tax, NI or VAT, prompting public dissent from deputy leader Lucy Powell, while ministers argue the fiscal position requires broader contributions; if enacted, it would be the first basic rate rise in about 50 years.
- Industry groups warn separate pension changes are being weighed, with the Society of Pension Professionals saying curbs on salary sacrifice could cut a typical £35,000 earner’s take‑home pay by £560 a year, and reports suggest a cap that could raise about £2bn, though final decisions remain unconfirmed.