Taxpayers ignorant of NICs rise
Up to 60% of tax payers do not know what extra costs they will have to meet when their National Insurance contributions increase on 6 April, according to a survey by KPMG.
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The research also revealed that as many people do not expect their employers to offer a pay rise to cover the rise in tax.
In last year’s Budget, Gordon Brown announced an additional contribution of1% of earnings from next month.
Andrew Smith, chief economist at KPMG, comments: ‘A 1% hit may not sound like huge amount to people but it is likely to contribute to a significant slowdown in consumption growth this year.
‘The fact that the majority of the population is unaware of the effect of the change suggests that many have yet to adjust their behaviour. The choice consumers will inevitably face is between borrowing to compensate – which might not prove so attractive as the housing market slows – or having to curtail their spending plans.’