The New Employment Tax

Paul Mortimer-Lee

No 30, National Institute of Economic and Social Research (NIESR) Policy Papers from National Institute of Economic and Social Research

Abstract: The government announced the employment tax increase in September adds needless complexity to the tax system, encourages self-employment rather than employment, and hits hardest the labour-intensive sectors that suffered most from Covid. It will encourage a shift away from labour-intensive sectors and reduce the UK's international competitiveness. The levy will add to the squeeze on real household incomes implied by surging inflation and, therefore, subtract from consumer and business spending. Higher health and social spending will add slightly more to GDP than the levy subtracts in the short run, but this will fade over time and GDP could end up slightly lower after three years. One possible intention is to increase this payroll tax further in the future, probably by linking it to NHS and social care outlays.

Date: 2021-10
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.niesr.ac.uk/wp-content/uploads/2021/10 ... zWR0XPr0YNoy84h191MK

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nsr:niesrp:30

Access Statistics for this paper

More papers in National Institute of Economic and Social Research (NIESR) Policy Papers from National Institute of Economic and Social Research 2 Dean Trench Street Smith Square London SW1P 3HE. Contact information at EDIRC.
Bibliographic data for series maintained by Library & Information Manager ().