Chancellor urged to cut National Insurance but hike Income Tax in Autumn Budget

Chancellor Rachel Reeves has been urged to cut National Insurance contributions (NICs) and increase Income Tax to create a 'level playing field' and protect workers' pay.

The Resolution Foundation said the Chancellor should make a 2p cut to NICs as well as a 2p rise in Income Tax in the Autumn Budget.

The think tank said the move would help to address 'unfairness' in the tax system.

Adam Corlett, Principal Economist at the Resolution Foundation, said: 'Significant tax rises will be needed for the Chancellor to send a clear signal that the UK's public finances are under control.

'Any tax rises are likely to be painful but given the fallout from the recent employer NICs rise, the Chancellor should do all she can to avoid loading further pain onto workers' pay packets.

'She can do this by switching our tax base away from employee NICs and onto Income Tax, which is paid by a far broader group in society. This should form part of wider efforts to level the playing field on tax, such as ensuring that lawyers and landlords face the same tax rates as their clients and tenants.

'These sensible reforms would raise revenue while doing the least possible harm to workers and the wider economy. And by acting decisively, the Chancellor can turn her full attention back onto securing stronger economic growth.'

Internet link: Resolution Foundation