Nicola Campbell, a Partner at Azets, asserts that while the government claims the NI increase won’t impact employees directly, the reality is that business decisions will reflect these costs. Businesses facing increased expenses will have to make difficult choices, potentially leading to hiring freezes or additional responsibilities for existing employees. The burden on small businesses, particularly following corporation tax increases, could ultimately trickle down to workers, impacting their roles and earnings.
Businesses with significant payrolls, for example, one with a £1 million payroll, will face an additional National Insurance burden of £20,000 due to the proposed increase. This significant cost may force companies to rethink hiring decisions, potentially opting to pause recruitment or require their current employees to take on more work. The inevitable constraints on salaries and benefits enhancements mean employees could face a diminished earnings potential in the near future.
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