Can your business afford an additional 9% National Insurance increase?

The National Insurance increase will impact your business

Tags: Automotive Corporate Taxation

As we move closer toward the Spring Statement, due to be delivered on 23 March, discussions over the National Insurance (NI) increase are starting to stir again.

The increase is 1.25% points, as for employers it’s going up from 13.8% to 15.05%. However, the percentage that this converts to in terms of contribution is actually closer to 8%. Using the average wage in the UK, which is currently £31,772*, the table below outlines the monetary increase.

Employee annual salaryTax year 2021/22 employer NICTax year 2022/23 employer NICDifference in contribution
£31,772£3,164£3,451£287

The planned increase will have a direct impact on all businesses via National Insurance Contributions (NICs) for payroll, as well as Class 1A NIC applicable on employee benefits. The difference in contributions is £287, which is a 9% increase of the £3,164 figure. Multiply the additional contributions for a small company of 49 people, and it’ll cost businesses almost £15,000 more per year, for a larger company with 249 employees, it will total more than £70,000.

A solid strategy will be required in order to identify where savings can be materialised elsewhere in your business to compensate for the NIC increase.

Download our report to discover:

  1. How the NI increase will impact payroll costs.
  2. A solution to deliver business savings.
  3. What the increase means for businesses long-term?

Car Benefit Solutions is a specialist provider of employee car benefits and a leading provider of Employee Car Ownership Schemes. To find out how we can help you, please get in touch.

*Office of National Statistics – Employee earnings in the UK: 2021

 

Contact Details

The Barracks,

400 Bolton Road,
Bury, BL8 2DA

Monday - Friday

8:30 - 17:30