delete The Social Security (Contributions) (Re–rating and National Insurance Fund Payments) Order 1995
This Order adjusts social security contribution thresholds and rates for the 1995-96 tax year. It raises Class 1 secondary (employer) NIC brackets and reduces percentage rates by 0.6% across three brackets, increases Class 2 self-employed NICs from £5.65 to £5.75 weekly, raises the Class 2 small earnings exception from £3,200 to £3,260, increases Class 3 voluntary NICs from £5.55 to £5.65, adjusts Class 4 self-employed profit limits (lower from £6,490 to £6,640, upper from £22,360 to £22,880), and sets the prescribed benefit expenditure percentage at 10%.
This is a payroll tax increase that raises the cost of employment and discourages entrepreneurship. National Insurance contributions function as a tax on hiring workers — higher contributions reduce employer willingness to take on staff and worker take-home pay. The Class 2 and Class 4 increases directly tax self-employment and business profits, discouraging entrepreneurship. These marginal rate increases compound existing labor market rigidities, particularly harming lower-income workers and small businesses. As an annual re-rating mechanism, this perpetuates a hidden payroll tax burden that erodes competitiveness and employment, particularly when other regulatory costs are factored in.