It is believed that sole traders and partnerships could be hit in Gordon Brown's Pre-Budget report, as one of the areas that could be changed is the National Insurance threshold. Anyone earning between £4,875 and £32,760 currently pays 11% in National Insurance, anything above this is taxed at 1%. It is believed that this is going to be raised to meet the higher income tax threshold of £37,295. This change would allow the government to raise about £1.35 billion a year, and still be able to claim that he had not raised taxes, as national insurance is not classed as a tax. This rise could cost higher earners around £450.00 extra a year.
Our view
You voted Labour into power. You pay more in tax and National Insurance than you have ever done. For some this has proved great in terms of social welfare for the less fortunate, for most it is not good news. We will find out Monday in the Chancellors pre-budget report.