Budget 25: Employer NI contributions thresholds frozen for three years

This Budget has extended the allowances and threshold freezes in income tax and NI contributions to the end of the forecast period. This means the majority will have been frozen for most of the 2020s. According to the OBR, freezing thresholds, rather than raising them in line with inflation, "increases tax receipts as rising wages tip ever greater numbers of workers into the tax system or onto higher rates, which is known as ‘fiscal drag'". The main drivers of the forecast 3.6% of GDP increase in the tax take from 2024/25 to 2030/31 are NI contributions, which account for 2.3 percenta...