By Timothy Adler on Small Business – Advice and Ideas for UK Small Businesses and SMEs
Businesses have criticised government for a national insurance hike of 1.25 per cent each for both employers and staff – a combined 3 per cent rise – as firms are only just recovering from the pandemic.
Economists have warned the £11bn national insurance contribution (NIC) hike will create unemployment and stifle future job creation.
The new health and social care levy will generate in total £14bn a year, which falls to a net £12bn of income as some will be paid by public sector workers. About £11bn will come from NICs and £600m from increasing tax on dividends.
Mike Cherry, chairman of the Federation of Small Businesses, said: “Business owners who have done all they can to retain and support their staff during the pandemic are now being punished for that loyalty with an £11bn increase in NICs, which essentially serve as a jobs tax.”
Andrew Goodacre, chief executive of the British Independent Retailers Association, said: “Of all the options available to the Government, it is disappointing that increases in national insurance have been chosen because of the impact on lower paid workers and small businesses … despite all