Tag Archive for National Insurance

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How much national insurance hike will cost your business

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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

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Hot Business News Today

How much national insurance hike will cost your business

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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

Read more...

Hot Business News Today

Expected national insurance hike to cost businesses £3.5bn

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By Timothy Adler on Small Business – Advice and Ideas for UK Small Businesses and SMEs

UPDATED: The government’s expected 1.2 per cent hike in national insurance will cost businesses up to £3.5bn to match employee contributions, economists have warned.

The Institute for Fiscal Studies estimates that if £10bn of additional revenue is generated by the NI tax increase, businesses will need to find between £3bn and £3.5bn extra from April.

The self-employed will also face the NI rise, though they already make lower contributions.

>See also: Small business owners face increased national insurance contributions

Professor Len Shackleton, research fellow at the Institute of Economic Affairs, described employer national insurance as a “crude payroll tax” which discourages lower-paid employment and is then passed onto workers in the form of lower pay.

Craig Beaumont of the Federation of Small Businesses told the Daily Telegraph: “Hiking the jobs tax on employees and employers would make it more expensive for businesses to create and maintain jobs.”

Mike Cherry, chairman of the FSB, told the newspaper: “This regressive levy is yet another outgoing for small businesses and sole traders to worry about against a backdrop of spiralling input prices, supply chain disruption, a deepening late payment crisis, rent arrears, rates bills

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Hot Business News Today

Expected national insurance hike to cost businesses £3.5bn

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By Timothy Adler on Small Business – Advice and Ideas for UK Small Businesses and SMEs

The government’s expected 1.2 per cent hike in national insurance will cost businesses up to £3.5bn to match employee contributions, economists have warned.

The Institute for Fiscal Studies estimates that if £10bn of additional revenue is generated by the NI tax increase, businesses will need to find between £3bn and £3.5bn extra from April.

The self-employed will also face the NI rise, though they already make lower contributions.

>See also: Small business owners face increased national insurance contributions

Professor Len Shackleton, research fellow at the Institute of Economic Affairs, described employer national insurance as a “crude payroll tax” which discourages lower-paid employment and is then passed onto workers in the form of lower pay.

Craig Beaumont of the Federation of Small Businesses told the Daily Telegraph: “Hiking the jobs tax on employees and employers would make it more expensive for businesses to create and maintain jobs.”

Mike Cherry, chairman of the FSB, told the newspaper: “This regressive levy is yet another outgoing for small businesses and sole traders to worry about against a backdrop of spiralling input prices, supply chain disruption, a deepening late payment crisis, rent arrears, rates bills returning,

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Small business owners face increased national insurance contributions

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By Timothy Adler on Small Business – Advice and Ideas for UK Small Businesses and SMEs

UPDATED: The government is pondering whether to increase national insurance contributions for both small business owners and employees to fund reform of social care.

The Treasury is debating whether to increase both employer and employee national insurance contributions by 1 percentage point – a penny in every pound both small business owners and their employees pay, according to the Times.

Employers currently pay 13.8 per cent as the main national insurance rate with employees paying 12 per cent of their earnings.

>See also: Government ‘should write off’ £1.7bn of Covid loan debt

Increasing national insurance contributions by 1 percentage point – for both employers and employees – would raise £10bn a year and would probably be dubbed a new “health and social care levy”.

Initially, it would be used to cut alarming NHS waiting lists for treatment, which are feared could rise from 5.3m to 13m patients.

It would then be spent to cap care costs, along the lines of a decade-old proposal to limit costs to £50,000, so families do not end up selling their homes and plug growing gaps in care treatment.

>See also: 20% of business workers self-isolating due

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Hot Business News Today

Small business owners face increased national insurance contributions

by  •  • 0 Comments

By Timothy Adler on Small Business – Advice and Ideas for UK Small Businesses and SMEs

The government is pondering whether to increase national insurance contributions for both small business owners and employees to fund reform of social care.

The Treasury is debating whether to increase both employer and employee national insurance contributions by 1 percentage point – a penny in every pound both small business owners and their employees pay, according to the Times.

Employers currently pay 13.8 per cent as the main national insurance rate with employees paying 12 per cent of their earnings.

>See also: Government ‘should write off’ £1.7bn of Covid loan debt

Increasing national insurance contributions by 1 percentage point – for both employers and employees – would raise £10bn a year and would probably be dubbed a new “health and social care levy”.

Initially, it would be used to cut alarming NHS waiting lists for treatment, which are feared could rise from 5.3m to 13m patients.

It would then be spent to cap care costs, along the lines of a decade-old proposal to limit costs to £50,000, so families do not end up selling their homes and plug growing gaps in care treatment.

>See also: 20% of business workers self-isolating due to

Read more...

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Rishi Sunak ignores small business and self-employed in Spending Review

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Originally written by Anna Jordan on Small Business
Rishi Sunak has mostly ignored small business hit by the pandemic and the struggling self-employed in today’s Spending Review.
The chancellor shrugged off calls for him to cut national insurance and help those self-employed such as company directors who have found themselves excluded from government Covid support.
He did however freeze any increase in business rates when they kick back in again in April. The Treasury estimates that this move will save businesses £575m over the next five years.
Indeed, there was more help for the employee than the employer, as Mr Sunak increased the National Living Wage to £8.91 per hour for those aged over 23 and announced a Restart Scheme to help the newly unemployed.
Jonathan Geldart, director general of the Institute of Directors, welcomes the Restart Scheme but said the chancellor missed a trick by not combining the scheme with a cut to employers’ NI contributions.
>See also: Rishi Sunak urged to help self-employed company directors
Nigel Morris, employment tax director at MHA MacIntyre Hudson, said that Sunak failed to deliver for businesses.
Morris said: “More help for businesses is essential to protect our economy, yet we saw no major support made available for them, for example

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Hot Business News Today

Rishi Sunak ignores small business and self-employed in Spending Review

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Originally written by Anna Jordan on Small Business
Rishi Sunak has mostly ignored small business hit by the pandemic and the struggling self-employed in today’s Spending Review.
The chancellor shrugged off calls for him to cut national insurance and help those self-employed such as company directors who have found themselves excluded from government Covid support.
He did however freeze any increase in business rates when they kick back in again in April. The Treasury estimates that this move will save businesses £575m over the next five years.
Indeed, there was more help for the employee than the employer, as Mr Sunak increased the National Living Wage to £8.91 per hour for those aged over 23 and announced a Restart Scheme to help the newly unemployed.
Jonathan Geldart, director general of the Institute of Directors, welcomes the Restart Scheme but said the chancellor missed a trick by not combining the scheme with a cut to employers’ NI contributions.
>See also: Rishi Sunak urged to help self-employed company directors
Nigel Morris, employment tax director at MHA MacIntyre Hudson, said that Sunak failed to deliver for businesses.
Morris said: “More help for businesses is essential to protect our economy, yet we saw no major support made available for them, for example

Read more...

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MPs to fight Sunak over move to hike national insurance for self-employed

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Originally written by Timothy Adler on Small Business
MPs plan to fight chancellor Rishi Sunak over his move to increase National Insurance tax for the self-employed, bringing it into line with PAYE.
Back in March, the chancellor hinted that he wanted to increase NI for the self-employed, to help pay for the Self-Employed Income Support Scheme (SEISS).
To date, the SEISS has cost the Treasury £13.4bn, with 2.7m self-employed claiming for the first income support grant, and 2.2m accessing the second.
>See also: Rishi Sunak plans grants for small businesses hit by hard lockdown
Earlier this year, Sunak was considering whether to raise national insurance contributions (NICs) paid by the self-employed by 3 per cent to pay for the SEISS.
Currently, class 4 NICs for self-employed people stand at 9 per cent a year, while those who are employed pay 12 per cent a year. Increasing this duty would add £500 to the annual tax bill for anyone self-employed earning over £42,000 a year; and £200 for the average self-employed worker.
The chancellor has since delayed his autumn statement, given the fast-moving coronavirus situation and how quickly the Treasury has to think on its feet, expanding the Job Support Scheme.
>See also: £40m funding for hospitality firms in

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Sajid Javid cools talk of raising national insurance threshold to £12,500

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Originally written by Timothy Adler on Small Business
Chancellor Sajid Javid has managed expectations about the Government lifting the national insurance threshold to £12,500 if it wins the election.
Blindsided by a question from a factory worker in Teeside as to whether tax cuts were for the rich, an apparently stung Boris Johnson blurted out that his government would be “cutting national insurance up to £12,000”.
Johnson said: “If you look at what we’re doing, and what I said in the last few days, we’re going to be cutting national insurance up to £12,000, making sure we cut business rates for small businesses, we are cutting tax for working people.”
>See also: Boris Johnson offers small firms nearly £500m worth of tax cuts
However, Javid told Sky News that the plan to raise the NI payment threshold to £12,500 is an “ambition” which will “not necessarily” be reached in the next parliament.
NICs are taken from workers’ salaries and used to fund the NHS, benefits and the state pension. Workers are charged 12pc on earnings between £8,628 and £50,000.
If re-elected the Conservatives would definitely raise the threshold for millions of small business workers for them to only start NI at £9,500 next year, compared with £8,632

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