Lib Dems warn families and businesses in Wales are facing a ‘tax bombshell’

Families and businesses in Wales are facing ‘a tax bombshell’ of almost £400 million this year due to the UK Government’s national insurance increase, according to research by the Welsh Liberal Democrats.

National Insurance payments went up this week from 12.5% to 13.25%, after Boris Johnson backtracked on a Conservative manifesto promise not to increase NI, despite a fierce backlash from politicians and poverty campaigners.

The Welsh Liberal Democrats analysis concludes families in Wales will have to pay out an estimated £157 million more in National Insurance contributions at an average of almost £113 per household, at a time when families are already facing soaring energy bills.

Businesses across Wales are also having to pay out an additional £238 million as a result of the increase.

Cost of living crisis

Calling for an emergency VAT tax cut to cushion the blow for struggling families, Welsh Liberal Democrat Leader Jane Dodds MS said: “Families in Wales are being crippled by the worst cost of living crisis in a generation, struggling to put food on the table and afford sky-high energy bills.

“The last thing they need is an unfair tax raid. Yet the Conservatives are piling on the misery by breaking their promise not to hike up national insurance, in a move that will hit our community hard.

“The Welsh Liberal Democrats are fighting for a fair deal that would put money back into people’s pockets through an emergency tax cut. Not only would it help everyday families, but also small businesses in Wales which are a vital part of the economy and major employers.

“Our plans would kill two birds with one stone, helping those struggling to make ends meet while giving our treasured local businesses the shot in the arm they need. The Conservatives meanwhile continue to harm our economy and make people’s paychecks smaller.”