Increased employer National Insurance contributions could change hiring plans and lead to raised prices, says East Midlands Chamber after nationwide research revealed 8 out 10 businesses expect to be impacted when the new cost takes effect from April.
The renewed warning from East Midlands Chamber follows new findings published by the British Chambers of Commerce (BCC) and professional services firm AAB that revealed 6 out of 10 businesses expect recruitment to be affected by the introduction of National Insurance contributions and more than half expect prices to be impacted.
Summary of findings from surveyed businesses in the BCC research:
- 82% said raised National Insurance contributions would impact their business
- 58% said recruitment would be impacted
- 54% said prices would be impacted
- 79% did not feel the government had properly assessed the impact of changes
East Midlands Chamber Chief Executive Scott Knowles said: “When firms have faced incredibly challenging conditions for such a prolonged period, higher National Insurance contributions from 1 April 2025, combined with a lower threshold at which payments begin is not going to be easy and businesses are going to have to make difficult decisions.
“The picture we’re seeing in the national data from the British Chambers of Commerce largely parallels the findings of our Quarterly Economic Survey for the East Midlands which found the same number of businesses – just over half – anticipate having to put up prices, while the East Midlands saw the number of businesses expecting to revise their recruitment plans double from the previous quarter to 22%.
“With growth being the goal the government talks of most frequently, raising the staffing cost of businesses is going to make any growth that much harder to achieve, while rising inflation on top of higher NI contributions will only push up price pressure.
“Ahead of this year’s comprehensive spending review, political leaders need to ensure they are listening to what firms are saying, that measures announced in the review are supportive of businesses and enable growth.”
To view East Midlands Chamber’s most recent Quarterly Economic Survey findings for the region (Q4 2024) click here.
To view the British Chambers of Commerce (BCC) NIC’s Impacts Survey click here
