Workers face losing £439 from payslip under rule change in Budget

Workers have been warned over a £439 blow under the Labour Party government as Chancellor Rachel Reeves delivers her Autumn Budget today. Ms Reeves's reported plans to hike employers’ National Insurance will have a big impact on those who work as freelancers.

It is estimated that the plans will cost them as much as £439 a year. Ms Reeves's National Insurance hike could raise £17billion each year when she unveils her Budget on Wednesday. Speaking ahead of the budget, former Prime Minister Rishi Sunak said putting up employers’ national insurance would be a “complete betrayal”.

As the Mail reports, he said: "Rachel Reeves promised that her plans were fully funded, and she promised that she wouldn’t change the debt target because that would be “fiddling the figures”. We already know that those promises are totally worthless because she is going to change her fiscal rules so she can go on a borrowing spree.

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"If she was to compound that by breaking her promise to the British people not to raise taxes on working people by increasing national insurance, that would be a complete betrayal." Andy Chamberlain, of self-employment body IPSE, told The Telegraph: “It’s difficult to see how this wouldn’t breach Labour’s pledge not to raise taxes for ‘working people’.”

He added: “The reality is that if employers’ National Insurance increases, they’ll have to cover the cost through a reduction in their take-home pay.” A freelancer who earns £60,000 a year would pay an extra £439 if National Insurance rises by two percentage points to 15.8%.

Lucy Smith, owner and founder of Clarity Umbrella, also told The Telegraph: “An increase in employers’ National Insurance will inevitably have a negative impact on the ever-important flexible workforce. We may be seeing the lower-paid temp workforce squeezed further on top of the cost-of-living crisis, making this way of working untenable.”