Employers pay record £105bn National Insurance

Employers pay record £105bn National Insurance
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Peninsula Team, Peninsula Team

(Last updated )

The amount of National Insurance paid by employers has risen to an all-time high of £105bn, up £8bn in a single year.

The previous two years have also seen significant increases with the figure up from £85bn to £97bn from 2020-21 to 2021-22. Currently employers pay 13.8% on employees’ earnings, with calls for a cut to the rate in the Autumn Statement to encourage growth.

Nick Donohue, partner at UHY Hacker Young, said: ‘Employers are being hit twice over – once by wage inflation and once by the jump in National Insurance bills.

‘The Chancellor should look at cutting employers’ National Insurance in the Autumn Statement. The number of companies being forced into insolvency is at its highest level since the last financial crisis and there needs to be some respite.

‘Many people see National Insurance as a tax on employment. At a time of huge economic uncertainty, a cut would protect jobs and businesses.’

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The rise has hit the hospitality business particularly hard, where a staff shortage has also pushed up wages. One factor was the rise in the national minimum wage to £10.42 an hour from £9.50 an hour in April, a 9.7% rise. It is also set to rise in April 2024 bringing the hourly rate to at least £11.

The rise in minimum wage will also affect the amount of employer National Insurance.

The minimum wage increase coincided with a dip in consumer spending putting pressure on smaller companies.

Donohue also said: ‘Running a restaurant or pub has become far more challenging this year due to the jump in the minimum wage. That rise has had a significant impact on NI bills and cut margins to the bone for many.’

Visit BrAInbox today for instant answers on national minimum wage, like What records do I have to keep to show I have paid the minimum wage?

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