FAMILIES and businesses in Wales are facing a tax bombshell of almost £400 million this year due to the Conservative government’s hike to national insurance, research by the Welsh Liberal Democrats has revealed.

National Insurance payments went up this week (April 6) from 12.5% to 13.25%, after Boris Johnson’s decision to break a Conservative manifesto promise and hike the tax.

The latest figures from the Office for Budget Responsibility predict that the UK is facing a £10.9 billion tax hit this year from the move, with around 40% of this being paid by workers and the rest by businesses.

Analysis of official figures by the Welsh Liberal Democrats shows this means families in Wales are set to pay out an estimated £157 million more in National Insurance contributions. This comes to an average of almost £113 per household, at a time when families are already facing soaring heating bills.

The Conservatives’ broken promise is also set to hit high streets across Wales hard, with a £238 million tax raid on local businesses including shops, restaurants and cafes. 

The Welsh Liberal Democrats have set out plans to “kill two birds with one stone,” by slashing the top rate of VAT to 17.5% this year. The move would save families an average of £600 and give businesses a boost by encouraging spending and keeping prices low.

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.”