Rachel Reeves and Liberal Democrat MP Vicki Slade (Image: GETTY/BBC)
A nursery in the West Country will have to fork out an additional ￡500,000 every year thanks to the rise in employer National Insurance contributions unveiled in last week’s Budget, Chancellor Rachel Reeves has been warned.
Vikki Slade, the Liberal Democrat MP for Mid Dorset and North Poole, made her shocking claim as she highlighted the impact the sweeping changes would have on local businesses and charities in her constituency.
Ms Slade said: "To govern is to choose, and I am shocked at some of the short-sightedness of the decisions in last week’s Budget.
"While average workers may not see a tax increase on their payslip, their employers are now faced with the difficult choice of whether to consider pay rises at all, or whether redundancies might be necessary."
Ms Slide continued: “Corfe Mullin Dental Practice recently hired a graduate dentist to help serve local NHS patients, particularly children, but the NI increase has effectively eliminated half of her salary.
READ MORE: Rachel Reeves warned 'catastrophic' decision could decimate UK farms
Chancellor Rachel Reeves leaves Downing Street to deliver her Budget last Wednesday (Image: Getty)
"If we are to retain NHS dentists, they need immediate exemptions from these hikes.”
Ms Slade also noted that Julia’s House Children’s Hospice is facing an additional ￡242,000 annually due to the National Insurance rise.
Meanwhile, Tops Nursery, which operates multiple early years settings in her constituency, anticipated shelling out an eye-watering half a million pounds in extra costs, without any corresponding increase in government childcare funding.
Ms Slade concluded: "The Liberal Democrats have long advocated for increased taxes on energy companies and big banks. We believe those with the broadest shoulders should bear the heaviest burdens.
Don't miss...
'Rachel Reeves has one sensible option left — she must U-turn on farming' [INSIGHT]
Families could pay up to 70.5% tax on unused pension funds after Budget [ANALYSIS]
'Just when you thought inflation nightmare was over - Reeves brings it back' [PICTURES]
Sunday Morning with Trevor Phillips: Chancellor Rachel Reeves speaks on the Budget https://t.co/fRwjjXiwsy
— Sky News (@SkyNews) November 3, 2024
SUBSCRIBE Invalid email
We use your sign-up to provide content in ways you've consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. Read our Privacy Policy
"Unfortunately, this Budget appears to have misjudged where those broad shoulders lie.”
Ms Reeves last Wednesday announced a significant rise in employer National Insurance Contributions (NICs), increasing the rate from 13.8% to 15% starting in April 2026.
She described this decision as the "hardest" of the Budget, aiming to secure funding for essential public services and health spending without directly raising taxes on workers.
This increase is expected to generate ￡25.7 billion by 2028, but has sparked concerns from businesses, which warn it could affect wages and lead to job cuts.
Trending
To mitigate some of the impact, Ms Reeves doubled the Employment Allowance for small businesses to ￡10,500.
Speaking on Sunday, Ms Reeves admitted she was "wrong" when she said during the election campaign that she would not need to raise taxes, but insisted further increases will not be needed.
DON'T MISS
Powered by
34 DWP errors that could reduce the size of your state pension
3 Comments
Martin Lewis says workers losing ￡369 each after National Insurance change
Comments
'How could you?' BBC QT audience member rips into Labour minister over tax bombshell
494 Comments
Rachel Reeves red-faced as top economist brands Treasury's Budget document 'nonsense'
118 Comments
Rachel Reeves told to go back to her 'socialist abacus' after fury over tax hikes on GPs
51 Comments
'Rachel Reeves' Budget shows Labour won't cower away from difficult decisions'
74 Comments
'Dishonest' Rachel Reeves slammed for breaking promises and clobbering working people
265 Comments
Expert warns benefit changes is ‘ripping billions away from disabled people'
Comments
Rock star rips into Rachel Reeves - says Budget will be ‘catastrophic' for cancer patients
Comments
Shocking amount Reeves has made from rentals after clobbering landlords
475 Comments
WASPI warning this winter as state pensioners will 'stand still'
21 Comments
'Get ready!' Lee Anderson's brutal two-word warning after markets turn on Rachel Reeves
222 Comments
DWP gives ￡3,830 boost to people claiming these four benefits
11 Comments
Tory leadership LIVE: Badenoch or Jenrick lie in wait as Starmer suffers devastating blow
451 Comments
Lower paid women will be worst hit by Reeves' Insurance tax grab
233 Comments
Rachel Reeves left squirming by Laura Kuenssberg during fiery clash
840 Comments
Andrew Neil exposes 'small print detail' in Labour's 'stupid' Budget you might have missed
279 Comments
Rachel Reeves shamelessly admits she was wrong to promise no Labour tax hikes
287 Comments
Families face a ￡9,700 tax bill over the next five years thanks to Rachel Reeves
38 Comments
Martin Lewis urges people earning over ￡60,000 to claim HMRC benefit
1 Comments
34 DWP errors that could reduce the size of your state pension
3 Comments
Martin Lewis says workers losing ￡369 each after National Insurance change
Comments
'How could you?' BBC QT audience member rips into Labour minister over tax bombshell
494 Comments
Rachel Reeves red-faced as top economist brands Treasury's Budget document 'nonsense'
118 Comments
Rachel Reeves told to go back to her 'socialist abacus' after fury over tax hikes on GPs
51 Comments
'Rachel Reeves' Budget shows Labour won't cower away from difficult decisions'
74 Comments
'Dishonest' Rachel Reeves slammed for breaking promises and clobbering working people
265 Comments
Expert warns benefit changes is ‘ripping billions away from disabled people'
Comments
Rock star rips into Rachel Reeves - says Budget will be ‘catastrophic' for cancer patients
Comments
Shocking amount Reeves has made from rentals after clobbering landlords
475 Comments
WASPI warning this winter as state pensioners will 'stand still'
21 Comments
'Get ready!' Lee Anderson's brutal two-word warning after markets turn on Rachel Reeves
222 Comments
DWP gives ￡3,830 boost to people claiming these four benefits
11 Comments
Tory leadership LIVE: Badenoch or Jenrick lie in wait as Starmer suffers devastating blow
451 Comments
Lower paid women will be worst hit by Reeves' Insurance tax grab
233 Comments
Rachel Reeves left squirming by Laura Kuenssberg during fiery clash
840 Comments
Andrew Neil exposes 'small print detail' in Labour's 'stupid' Budget you might have missed
279 Comments
Rachel Reeves shamelessly admits she was wrong to promise no Labour tax hikes
287 Comments
Families face a ￡9,700 tax bill over the next five years thanks to Rachel Reeves
38 Comments
Martin Lewis urges people earning over ￡60,000 to claim HMRC benefit
1 Comments
34 DWP errors that could reduce the size of your state pension
3 Comments
Martin Lewis says workers losing ￡369 each after National Insurance change
Comments
'How could you?' BBC QT audience member rips into Labour minister over tax bombshell
494 Comments
Rachel Reeves red-faced as top economist brands Treasury's Budget document 'nonsense'
118 Comments
Rachel Reeves told to go back to her 'socialist abacus' after fury over tax hikes on GPs
51 Comments
'Rachel Reeves' Budget shows Labour won't cower away from difficult decisions'
74 Comments
'Dishonest' Rachel Reeves slammed for breaking promises and clobbering working people
265 Comments
During a campaign event on June 11, Ms Reeves said she would not need to raise taxes beyond the increases already set out in the Labour Party's manifesto.
However, she told Trevor Phillips: "I arrived at the Treasury on July 5, just over a month after I said those words.
"I was taken into a room by the senior officials at the Treasury and they set out the huge black hole in the public finances, beyond which anybody knew about at the time of the general election."