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The cost of employers’ National Insurance Contributions (NIC) has jumped by £28 billion, more than the £23.9 billion predicted by the government.
Following the controversial announcement in the government’s Autumn 2024 Budget, the main rate of employers’ NIC increased on 6 April 2025 to 15% which led to costs for employers rising by 24% from £116 billion to £143.9 billion in the year to 31 March, according to accountancy group UHY Hacker Young.
This is more than the £23.9 billion increase predicted by the government.
UHY Hacker Young’s Phil Kinzett-Evans said:
“The increase in NIC has caused real pain for UK businesses and I’m not sure that the policymakers recognised or admitted this when they increased the tax.
“There have been a raft of redundancies announced across the hospitality and retail sector which have been directly attributed to the increase in NIC. In addition, the extra cost of NIC has slowed hiring.
“It is also hitting employers at the same time as they face extra red tape and costs through the Employment Rights Act.
“It’s now fairly widely recognised that the level of tax in the UK has got too high. Businesses need to see a sensible economic plan that sees a reduction in the business tax burden.”
