The increase in National Insurance may result in a raise in council tax.
Because of the National Insurance increase, council tax bills in England may rise next year.
From April 2022, businesses and individuals will pay a new National Insurance payment that will increase from 12% to 13.5 percent.
The government will contribute a portion of a £2 billion fund to councils with directly employed personnel, but MPs have said that the issue will affect councils that outsource services like rubbish collection to private companies.
National Insurance contributions will be a major expense for these councils.
On Homes Under the Hammer, a mother notices an unwanted modification to her home.
Taxpayers could face a double burden if authorities try to deal with the increase by raising their council tax.
Last night, Tory MP Geoffrey Clifton-Brown warned the House of Commons Public Accounts Committee that councils may be obliged to raise council tax to assist cover the higher expenses.
“Will a garbage collection firm that provides 100 percent of its service to the local government get reimbursed for all of their NICs?” he asked.
“If they don’t, the cost to local governments will rise, and it will have to be passed on to council taxpayers.”
The Treasury will not guarantee that council contractors will be paid by the government.
Instead, Cat Little, the Treasury’s Director General for Public Spending, emphasized that “all direct public sector employees will be reimbursed.”
Boris Johnson announced this week that from April 2022, companies and employees across the UK will pay 1.25 percent more in National Insurance, raising £12 billion a year for health and care.
A worker earning £24,100 will pay £180 per year, whereas a person earning £30,000 will pay £255.
From April 2023, the tax will be referred to as a ‘Health and Social Care Levy’ on pay stubs.