The recent budget announcements have brought significant changes for employers, particularly around Employer National Insurance Contributions. These changes could lead to additional financial pressures for businesses across the UK. If you’re an employer, it’s essential to understand these updates and how they might affect your business’s cash flow, workforce, and financial planning.
From April 2025, the rate of Employer NICs will increase from 13.8% to 15%. Additionally, the threshold at which employers start paying National Insurance Contributions will drop from £9,100 to £5,000 annually. These adjustments mean businesses will likely see higher costs associated with employing staff.
For detailed info on these changes, visit the official UK Government announcement.
For small businesses, the impact may be particularly noticeable.
How Will Changes to Employer National Insurance Contributions Affect Businesses?The combination of increased NIC rates and a lowered threshold could have a noticeable impact on business operations, particularly for those already managing tight budgets.
Key challenges include:
The Employment Allowance increase aims to help small businesses manage their rising Employer NICs. This allowance enables eligible employers to reduce their NIC liability, effectively easing some of the financial pressures brought on by the new budget measures.
Preparing for the Future: What Should Employers Do?With the changes to Employer National Insurance Contributions looming, now is the time for employers to take action. Here are some steps you can take:
At MYHR, we understand the challenges businesses face when adapting to new financial pressures. If you’re considering how to manage the impact of these Employer National Insurance Contributions or exploring options like workforce reshaping or redundancy planning, we’re here to help.
Our team can provide tailored support to ensure your business remains compliant, efficient, and well-prepared for the future.
Get in touch today to discuss your needs and find practical solutions that work for your business.
Founder and Director of My People People Ltd since 2014, running it's two brands: the generalist job board at OurBob.com and the Business Consulting, HR support and consultancy service at MYHR…
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