The Global Payroll Association's recent survey indicates a rising concern among UK SMEs regarding impending increases to Employer NIC contributions and the National Living Wage, with fears of layoffs growing. Following the Autumn Budget's announcement of NICs rising from 13.8% to 15% in 2025 and a 6.7% NLW hike to £12.21 an hour, 41% of SME owners now express serious concerns about financial pressures impacting staffing costs. This anxiety has led to a increased inclination towards salary sacrifice arrangements and a notable hesitance to expand headcounts in the coming year.
The GPA's latest survey demonstrates a troubling trend among UK SMEs: a significant increase in concerns over rising costs due to impending increases in Employer NICs and NLW.
Since the government's announcement, 41% of SMEs now feel heightened financial pressure, reflecting a marked increase in anxiety as businesses brace for the impact of these changes.
The likelihood of SMEs increasing headcount has dropped markedly, with 50% indicating they are reconsidering expansions due to the financial strain from higher employment costs.
In response to the imminent hikes in Employer NICs and NLW, there has been a significant rise in businesses looking into salary sacrifice arrangements, reflecting adaptive strategies.
#employment #small-and-medium-enterprises #national-insurance-contributions #national-living-wage #job-layoffs
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