Rachel Reeves urged to shift 2p from NI to income tax in autumn budget

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Rachel Reeves is under pressure to overhaul the UK’s tax system after the Resolution Foundation urged her to cut employee national insurance contributions by 2p and offset it with an equivalent rise in income tax. Employee national insurance is not paid by these groups, unlike income tax. While the shift would leave net employee taxes unchanged, it would technically amount to raising income tax – something Labour promised not to do during the election campaign. The Resolution Foundation said Reeves should use the budget to rebalance the £1tn tax system, reducing the bias against employees and raising more from those with greater wealth. Alongside the NI switch, it suggested reforms such as extending employer national insurance to partnerships, tightening corporation tax compliance, and introducing levies on sugar, salt and carbon-intensive travel.