Navigate the National Insurance Hike
28 September 2021
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28 September 2021
The Health and Social Care Levy is a new UK-wide tax being introduced to help pay for the NHS and social care in England, and as responsible business people I guess we all recognise our obligations in helping deal with the economic impact of the Corona virus pandemic. The temporary hike in National Insurance contributions is, I expect only the early stages of the economic recovery.
When will it commence? How will it affect my business?
From 6th April 2022 Class 1 (paid by employees) Class 4 (paid by the self-employed) and secondary classes 1 1A & 1B (paid by employers) will all rise by 1.25% for 1 year until 2023. Whilst recognising that we must all “do our bit” to help the economy, it would be foolish to ignore the potential damage to profitability from this additional (albeit temporary) cost increase when added to already rising pay rates, significant increases to material costs and the impact of labour shortages. Indeed, there’s never been a better time to revisit your engagement and employment contract arrangements – employed, self-employed or composite solutions!
What can I do to mitigate the impact?
At EEBs we can identify cost saving and compliant solutions that are tailor made to suit your exact business needs – and we can definitely mitigate the impact of the NI hike that can significantly reduce your payroll burden, see our worked example below:
Cost comparison of employment v self-employment 2021/2022
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