Employers NI increase to 15% from April 2025
AN INTERVIEW WITH MARVIN DOONDEEA
CAN YOU SUMMARISE THE CHANGES?
'As of April 2025, the UK government will raise Employer National Insurance contributions by 1.25 percentage points, bringing the total rate to 15%. This change, while necessary for funding public services, will undoubtedly have significant financial implications for businesses across all sectors. From large corporations like Tesco, facing an estimated £1 billion increase, to SMEs grappling with a £90-150k rise in costs, many companies will need to act quickly to stay ahead.’
WHAT DOES THIS MEAN FOR MY BUSINESS?
'For businesses with multiple sites or significant payrolls, the hike in NI could be a major operational challenge. A business owner recently shared that, due to the combined effects of higher National Insurance and rising minimum wage costs, they are facing a potential £90-150k increase in expenses. In response, they are already considering drastic measures, including the closure of sites to reduce overheads.
Small and medium-sized enterprises will also be affected, potentially leading to difficult decisions about staffing, expansion, and pricing?'
WHAT IS THE IMPACT ON CONTRACTORS AND IR35?
'Additionally, contractors impacted by the IR35 reform will also face the employer's contribution increase. As their tax burden grows, businesses relying on contracted workers may have to reconsider their staffing strategies and contractual arrangements, leading to further operational adjustments.'