National Insurance Archives - WRLO Accountants

Employment reforms continue to stifle business hiring intentions

WRLO Accountants — Tue, 01 Apr 2025 09:46:38 +0000

The government’s employment reforms are causing employers to put their hiring plans on hold, according to the Institute of Directors (IoD). The IoD noted that there was a small increase in payrolled employees in the latest Labour market data released by the Office for National Statistics (ONS). Estimates for payrolled employees in the UK increased by 9,000 between December 2024 and January 2025, said the ONS. However, the ONS data also showed static job vacancies and increase in the unemployment rate. Alex Hall-Chen, Principal Policy Advisor for Employment at the Institute of Directors, said: ‘Our data shows that half of business leaders facing higher National Insurance bills plan to reduce employment in response, and that business hiring intentions over the next year remain around lows last seen at the height of the Covid-19 pandemic. ‘The government missed an opportunity at Report Stage of the Employment Rights Bill to show that it has listened to business feedback about how to avoid the reforms damaging employment prospects. ‘The government’s Better Regulation Action Plan is a welcome shift in narrative, but such commitments will ring hollow if the principles are not first applied to its plans to increase the regulation and cost associated […]

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No further tax increases in Spring Statement

WRLO Accountants — Tue, 01 Apr 2025 09:37:04 +0000

Chancellor Rachel Reeves announced ‘no further tax increases’ in the 2025 Spring Statement. The Chancellor’s Autumn Budget contained a record £40 billion in tax increases. However, it did not raise personal taxes including, Income Tax, employee National Insurance contributions or VAT. Ms Reeves had pledged one fiscal event a year and confirmed that no taxes would be raised at the Spring Statement. Instead, the Chancellor made a number of announcements on spending and economic forecasts. The forecast from the Office for Budget Responsibility (OBR) halved the UK’s growth in 2025 from 2% to 1%. However, Ms Reeves pointed out that the Organisation for Economic Co-operation and Development (OECD) downgraded this year’s growth forecast for every G7 economy. The OBR forecasts show that inflation will average 3.2% this year before falling ‘rapidly’, meeting the Bank of England’s 2% target from 2027 onwards. Ms Reeves said that defence spending will increase to 2.5% of GDP, by reducing overseas aid. This means an extra £2.2 billion for the Ministry of Defence in the next financial year to address ‘increasing global uncertainty’. The government will spend a minimum of 10% of the MoD’s equipment budget on innovative technology, boosting production in places such as […]

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Employer NICs rise may have unforeseen consequences

WRLO Accountants — Fri, 08 Nov 2024 10:57:03 +0000

The extra costs of the increase in employers’ NICs could cause businesses to respond in ways the government did not intend, the Chartered Institute of Taxation (CIOT) has warned. At the Autumn Budget, Chancellor Rachel Reeves announced an increase to the rate of employer NICs by 1.2 percentage points, to 15% from 6 April 2025. The CIOT says that the increase extends the differential in the burden of tax and NICs borne by those in employment compared to those engaged as self-employed. The higher employers’ NICs goes, the greater the likelihood employers may seek ways to mitigate or absorb the burden, which could include potential alternative arrangements to taking on people as employees, adds the CIOT. Alternatives could include outsourcing or offshoring services and reducing the numbers of employees. Eleanor Meredith, Chair of CIOT’s Employment Taxes Committee, said: ‘While employers must pay employer NICs on their employees’ earnings, no employer NICs is due where someone is genuinely self-employed. ‘We are concerned that the increase in employers’ NICs could lead to an increase in ‘false self-employment’, where businesses trying to save money turn to arrangements where the worker is not directly employed by them, without necessarily appreciating the rules and risks […]

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