By james art Employers will pay an extra 1.2% to 15% from April 2025. The secondary threshold – the level at which employers start paying National Insurance on each employee’s salary – will also be reduced from £9,100 a year to £5,000. This will raise £25 billion annually by the end of the forecast period.
“I know this is a difficult choice. I don’t make this decision lightly,” she said.
She also unveiled an increase in Small Business Employment Allowance, which allows eligible employers to reduce their National Insurance liabilities.
She told the Commons: “Today I am increasing Employment Benefit from £5,000 to £10,500. This means 865,000 employers will pay no National Insurance at all next year, and over a million will pay the same or less as before .
“This will allow a small business to employ the equivalent of four full-time workers on the national wage without paying any national insurance on their wages.”
She admitted it was a “difficult decision”.
“But any responsible chancellor would have to make tough decisions today,” she said. “To raise the revenue needed to fund our public services and restore economic stability.”
“We are asking business to contribute more and I know the impact of this measure will be felt beyond business, as the OBR has set out today. But in the circumstances I’ve inherited, it’s the right choice.”
Chancellor Rachel Reeves opened her Budget speech by saying her “faith in Britain burns brighter than ever”.
She told the Commons: “On July 4, the country voted for change. This government has been given a mandate: to restore stability to our country and begin a decade of national renewal. To fix the foundations and achieve change through responsible leadership in the national interest. This is our task and I know we can achieve it.
“My faith in Britain burns brighter than ever and the reward on offer is huge.
“As the Prime Minister said on Monday, change needs to be felt: more pounds in people’s pockets, an NHS that is there when you need it, an economy that grows, creating wealth and opportunity for all because it is the only way to improve the standard of living.
“And the only way to stimulate economic growth is to invest, invest, invest.
“There are no shortcuts and to deliver this investment we must restore economic stability and turn the page on the last 14 years.”