OBR Chairman Richard Hughes described Chancellor Rachel Reeves' Budget as one of the UK’s largest in terms of tax rises, with employer National Insurance contributions set to increase. This move is projected to push the tax burden to 38% of GDP by the end of the decade - the highest since WWII. Hughes noted that about 75% of this cost will likely shift to employees, reducing real wages by an average of £600 annually. Report by Covellm. Like us on Facebook at http://www.facebook.com/itn and follow us on Twitter at http://twitter.com/itn
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00:00So this is one of the largest tax raising budgets in history, and it takes the UK's
00:04overall tax burden to 38% of GDP by the end of our forecast period at the end of the decade.
00:09That's the highest it's been in post-war history and on record.
00:12So the initial incidence of the tax, which raises about £800 per employee, is initially
00:17on the employer, but we assume that in the long run about three quarters of that is passed
00:22on to the employee through lower real wages.
00:24And that means that employees, by the end of our forecast period, are losing about £600
00:30as a result of their real wages being squeezed down by the fact that employers have to find
00:34the cost somewhere, and they do it by squeezing out real wages.