Rachel Reeves is set to increase employers' national insurance by up to 2 percentage points, significantly impacting the private sector to fund the NHS and balance the books.
The combined measures will raise about 20 billion and represent the biggest tax rise in Labour's first budget in 15 years, shifting financial burden primarily to the private sector.
Currently, employer contributions at 13.8% mean a company with ten workers earning 35,000 each pays 35,742 annually; a 2% increase would raise that to 40,922.
Public sector employers will not see these new tax burdens directly, as they will be reimbursed by the Treasury, indicating a strategic fiscal shift in Labour's budget planning.
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