New National Insurance rules could cost people in this wage bracket £1,800 each

Business leaders are speaking out about the rumoured tax hike from the new Labour Party government and Chancellor Rachel Reeves.

New National Insurance rules from November could be a "tax on jobs", business leaders have warned. Business leaders are speaking out about the rumoured tax hike from the new Labour Party government and Chancellor Rachel Reeves.

Speculation is rife that Labour will hike National Insurance on employers in the Autumn Statement and Budget, which takes place on October 30. The proposed hike has been slammed as a "tax on jobs" by Conservative Party leader candidate Robert Jenrick.

Research conducted by the Resolution Foundation found that charging National Insurance on employer contributions at a flat 13.8 per cent rate would increase up to £18 billion annually by the end of the 2020s but may potentially cost high-earners around £1,800 every year.

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Kate Nicholls, the chief executive of UK Hospitality, warned: "Any increase in National Insurance contributions makes it harder to employ people and to take a risk on recruitment and expansion, because the costs of it will be so much higher."

Charlie Nunn, the Lloyds Bank chief executive, added: "Anything that helps people continue to invest and take appropriate risk, we think, is really important. Anything that does the opposite would be a handbrake.

"Pensions, and contributions to pensions, are critical. We see about 40 per cent of people in the UK have a pension which won’t give them even a basic living allowance when they retire. So we need to increase enrolment and investments in pensions."

The party has come under pressure to clarify whether it sees the employer side of the tax as distinct from employee contributions, after promising during the election campaign “we will not increase National Insurance”.

A former Tory minister has said it would be “absurd” to claim that raising the levy on employers but not employees is not a breach of the explicit manifesto pledge.