FAMILIES in Ceredigion are set to pay out an estimated £2.69 million more in National Insurance contributions this year with the percentage rise and despite a threshold increase, research has revealed.
Data compiled by the Welsh Liberal Democrats show families and businesses in Ceredigion are together facing a tax bombshell of over £6.7 million this year due to the Conservative government’s hike to national insurance.
National Insurance payments went up on 6 April from 12.5 per cent to 13.25 per cent, meaning that anybody earning more than £9,880 a year will pay 1.25p more in the pound.
However, from July 2022 the point at which employees start paying NI will increase to £12,570 in a move announced by Chancellor Rishi Sunak.
Combining those two measures means that in the 12 months from April 2022, anyone earning less than about £34,000 will pay less NI than they did last year. Someone on £50,000 will pay £197 more.
The government says the extra money will initially go towards easing pressure on the NHS.
The latest figures from the Office for Budget Responsibility predict that the UK is facing a £10.9 billion tax hit this year from the move, with around 40 per cent of this being paid by workers and the rest by businesses.
Analysis of official figures by the Welsh Liberal Democrats shows this means families in Ceredigion are set to pay out an estimated £2.69 million more in National Insurance contributions.
This comes to an average of almost £78.20 per household, at a time when families are already facing soaring heating bills.
High streets across Ceredigion will also be hit hard, with a £4 million tax raid on local businesses including shops, restaurants and cafes.
The Welsh Liberal Democrats have set out plans to “kill two birds with one stone,” by slashing the top rate of VAT to 17.5 per cent this year.
The move would save families an average of £600 and give businesses a boost by encouraging spending and keeping prices low.
Welsh Liberal Democrat Leader, and Mid and West Wales MS Jane Dodds said: “Families in Ceredigion are being crippled by the worst cost of living crisis in a generation, struggling to put food on the table and afford sky-high energy bills.
“The last thing they need is an unfair tax raid. Yet the Conservatives are piling on the misery by breaking their promise not to hike up national insurance, in a move that will hit our community hard.
“The Welsh Liberal Democrats are fighting for a fair deal that would put money back into people’s pockets through an emergency tax cut.
“Not only would it help everyday families, but also small businesses in Wales which are a vital part of the economy and major employers.
“Our plans would kill two birds with one stone, helping those struggling to make ends meet while giving our treasured local businesses the shot in the arm they need.
“The Conservatives meanwhile continue to harm our economy and make people’s paychecks smaller.”
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