How frontline workers will be worse off thanks to Tory tax grab – Expert warning

Laura Kuenssberg grills Rishi Sunak on taxation rise

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The Government’s tax grab on millions of workers has caused widespread anger among voters and politicians. The hike in National Insurance by 1.25 percentage points will leave many working households hundreds of pounds worse off – but extra tax hikes could be coming for those with certain working situations.

The Prime Minister broke one of his six 2019 election “guarantees” to raise National Insurance payments by 1.256 percentage points starting in April 2022.

Mr Johnson said in the House of Commons: “Of course, no Conservative Government ever wants to raise taxes.

“And I will be honest with the House: I accept that this breaks a manifesto commitment, which is not something I do lightly.

“But a global pandemic was in no one’s manifesto.

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“I think that the people of this country understand that in their bones and can see the enormous steps this Government and the Treasury have taken.”

But despite the obvious economic effects of the coronavirus pandemic, experts argue that some types of taxpayers will be unfairly paying more than others – and many of these are the frontline workers who have kept the country on its feet throughout the coronavirus pandemic.

Rebecca Seeley Harris, former adviser to the Office of Tax Simplification and chair of the Employment Status Forum, argues that some workers will suffer more than others in the tax raid.

She told “This levy will cut across the whole of society and affect the people we rely on most to sustain society.

“Umbrella workers will see a 2.5 percent increase in tax. This will affect millions.”

An umbrella company is a company that employs a temporary worker, such as an agency worker or contractor on behalf of an employment agency.

There is no accurate record of how many people work in these types of contracts in the UK as they can change very often, but Ms Seeley Harris believes it will be millions.

Ms Seeley Harris continued: “In fact, some of our most experienced professionals, yet lowest-paid workers, such as those in front line health and social care, HGV drivers, and hospitality staff will also be significantly affected on take-home pay.

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“That’s because a large proportion of these workers are employed indirectly through an agency and paid through an umbrella.

“The proposals for April don’t take this into account.

“Umbrellas have been around for years, but this year more and more people have been paid through them as employers manage the risk of the off-payroll reforms that came into force in April this year.

“They don’t want the risk of getting a fine for getting IR35 wrong so outsource the risk to umbrellas.”

“But that creates problems for workers, who often don’t know they are being paid through an umbrella in the first place.

“Umbrellas are set up so that the workers pays both the employee NI AND the employer NI.

Ms Seeley Harris concludes that these types of workers will see their tax bill increase by 2.5 percentage points instead of 1.25.

She continued: “This seems wholly unfair, especially when you consider how crucial these workers are during a pandemic and for recovery.”

NHS workers have already lashed out at Government plans to offer just a one percent pay rise despite their incredible efforts during the pandemic.

The Government has since u-turned on the decision, now committing to a three percent pay rise for NHS staff including nurses, paramedics, consultants, dentists and salaried GPs.

But many feel the latest tax grab has wiped out the increase in salary.

One person tweeted: “The derisory 3% NHS pay offer will leave me less than a fiver a week better off after the ten percent hike in National Insurance takes effect. All the work of our lying spiv Prime Minister who repeatedly moans that he can’t live on £161k a year plus free housing.”

Another wrote: “Well national insurance going up by 1.25% and NHS staff pay increase by 3% – 1.25 = 1.75% pay increase. I’m sure that will do much to improve staff retention and don’t forget council tax increase next year so pay is not going up it’s going down. Thanks Boris.”

Ms Seeley Harris’s comment also come after a bombshell poll found Labour had leapfrogged the Conservatives for the first time.

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