Chancellor Jeremy Hunt’s Autumn Statement has been branded a “missed opportunity” as the Government is set to rake in an additional £26 billion from employers through freezes on National Insurance and VAT thresholds.

According to projections from the UK Treasury, the decision to keep the starting point for employers’ NI contributions at current levels for an extra five years will generate an additional £25.1bn between now and April 2028. Employers pay 13.8% on annual salaries of more than £9,100.

Meanwhile, maintaining the VAT threshold at £85,000 is projected to raise an extra £1.5bn over the same period.

Martin McTague, national chair of the Federation of Small Businesses (FSB), said Mr Hunt’s Autumn Statement was “high on stealth-creation and low on wealth-creation” as firms and consumers struggle against surging prices for energy and food. The Office for National Statistics (ONS) confirmed on Wednesday that inflation hit 11.1% in October, a 41-year high.

“While tackling inflation is essential, so are measures to create conditions for prosperity, growth and support enterprise,” Mr McTague said. “Today is a missed opportunity to avoid further economic slowdown.”

HeraldScotland: CBI Scotland director Tracy Black. Picture: Kirsty AndersonCBI Scotland director Tracy Black. Picture: Kirsty Anderson (Image: Kirsty Anderson)

He added: “Freezing the threshold for employer National Insurance at a time of such high inflation is a stealthy hike in the jobs tax, just as recessionary pressures threaten an increase in unemployment.

“Alongside the understandable rise in the Living Wage, this Budget will ramp up the costs of employment without offsetting that with measures to reduce other business costs.”

CBI Scotland director Tracy Black said the Chancellor deserved credit for delivering stability and protection for the most vulnerable. She welcomed the freeze in business rates and encouraged the Scottish Government to follow suit in its Budget next month.

“But stabilising public finances inevitably means difficult decisions have to be taken,” Ms Black added.

“Businesses will view a freeze in NICs thresholds and further windfall taxes as the sharpest stings in the tail. Firms will also need more detail on what happens with the business energy support scheme in the coming weeks.”

Justine Riccomini, head of tax at the Institute of Chartered Accountants Scotland (ICAS), said the cost of employment for all firms with an NICs bill of more than £5,000 per year will likely rise as salaries and wages increase between now and April 2028.

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“The Employment Allowance has been increased to £5,000 from the previous £4,000 per annum, but this will only help the smallest employers as only those with employer’s Class 1 NICs liabilities of less than £100,000 per annum are eligible for the reduction,” she added.

Meanwhile, the RAC has highlighted the possibility of a 23% increase in fuel duty from the end of March, which the independent Office for Budget Responsibility (OBR) has estimated will add £5.7bn to Government receipts next year. This would be a record increase, adding an estimated 12p per litre to the price of petrol and diesel.

“As things stand, drivers will face an enormous hike in the cost of fuel next spring due to fuel duty going up,” said Nicholas Lyes, head of roads policy at the RAC. “The OBR expects to see 12p added to a litre of fuel, as a result of the current 5p duty cut coming to an end combined with its scheduled rise – something that’s not been seen for over a decade due to duty being frozen in successive Budgets.

“The Government has always made a big deal of cancelling duty rises in the past and will face colossal pressure to do the same next year – after all, a rise of these proportions would heap yet more misery on the millions of households that depend on their vehicles, most of whom will [have] just endured one of the costliest winters on record.”