Hidden National Insurance rise in Budget 2008

Following a fairly uncontroversial Budget, it is only now that the finer details are emerging.

Although the basic rate of income tax has fallen from 22p to 20p, and the 10% rate has been abolished, it would appear that the Government has actually raised further income by fiddling with the National Insurance contributions bands.

Close inspection of the 2008/9 National Insurance rates reveals a massive £100 per week rise in the Upper Earnings Limit for Class 1 Contributions - the limit has risen from £670 to £770 per week.

The change to the NI ceiling will raise around £2bn per year according to tax experts - it will cost someone on £40,000 per year around £520 in extra taxes.

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Sign Up! - Make sure you sign up to our FREE weekly newsletter for the latest tax news and advice for small companies. Posted March 14, 2008

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