The “jobs tax” would break the manifesto promise, the Tories warn

Last week Sir Keir Starmer refused to rule out an increase in employers’ contributions in Northern Ireland when Rishi Sunak asked him about it in the House of Commons.

According to a recent study by think tank Resolution Foundation, charging NI on employer pension contributions at a flat rate of 13.8 per cent would raise up to £18 billion a year by the end of the decade.

Experts suggest taxing employer pension contributions could cost high earners £1,800 a year. Employers pay NI of up to 13.8 percent on an employee’s pay, but salary paid into a pension is tax-free.

This came after Chancellor Rachel Reeves watered down a planned crackdown on non-doms, warning that the move would lead to wealthy individuals leaving the country.

Other measures she expected to fill a £22 billion black hole, such as raising capital gains tax to up to 39 percent and closing a tax loophole for private equity, are also expected to raise less than predicted – fueling her fears will turn to taxation of the working population.

Business leaders warned that NI increasing employers’ contributions would hamper growth – one of Sir Keir’s top priorities.

Charlie Nunn, chief executive of Lloyds Bank, said: “Anything that helps people continue to invest and take appropriate risks is really important in our view.” Anything that does the opposite would be a handbrake.

“Pensions and pension contributions are crucial. We see that around 40 percent of people in the UK have a pension that does not provide them with even basic living expenses in retirement. That’s why we need to increase enrollment and investment in pensions.”