What the national insurance contribution changes mean
At the Budget, the Chancellor revealed how national insurance contributions were changing for employers.
She said: "We will increase the rate of employers' national insurance contributions increased by 1.2 percentage points to 15% from April 2025.”
“We will reduce the secondary threshold level at which employers start paying national insurance on each employee's salary from £9,100 a year to £5,000."
Crippling costs
Financial advisory firm PLS managing director Eddie Murphy estimated from April next year, when the changes come into place, an employee on an annual salary of £30,000 will cost £866 more to employ.
He said: “This further exposure to our already crippling payroll costs is already being made to the Government by our trade bodies at every opportunity.
“With the combination of January and February trading alongside the over doubling of business rates to pay from April 2025, a perfect storm is brewing.
“What we can do meanwhile is lobby local MPs and encourage customers to do the same. What we should not do is let our unique and wonderful businesses go quietly.”
Sector reaction
Recently, UKHospitality chief executive and the trade body’s board members, including the bosses of Fuller’s, Stonegate Group and Whitbread, wrote to the Chancellor, highlighting the ‘unprecedented damage’ the rise in employment costs will inflict on the sector.
More than 200 sector voices signed the letter, which warned the £3.4bn cost hikes will cause small business closures within a year, businesses to reconsider investment plans, jobs to be drastically cut, hours to be reduced.
Furthermore, Mojo managing director Martin Greenhow raised concerns about the changes in an opinion piece.
