National Insurance hike "a drag anchor on jobs growth", warn businesses

The government's new tax increase could hurt recruitment at a crucial time of recovery. But companies can mitigate increased costs, experts say.

by Caitlin Powell

Businesses have expressed concerns over plans to increase National Insurance (NI) contributions from next year, with experts urging employers to look at ways of mitigating the impact on the lowest earners. 

Prime minister Boris Johnson announced this week (7 September) that from April 2022 there would be a UK-wide 1.25% health and social care levy added on to both employer and employee NI contributions.

Johnson said the increase would share the cost “as fairly as possible” between individuals and businesses, claiming that the highest-earning 14 per cent of the population would pay around half of the revenue raised and that most small businesses would be protected – with 40 per cent paying nothing extra at all.

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