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A Hike in NICs Will Kill British Businesses

06-02-2025   


On the eve of the UK budget tomorrow (30th Oct 2024), British employers have expressed concerns that a rise in national insurance contributions (NICs) will pose a big threat to jobs, effect growth and potentially close down businesses.

The new Labour government have stated that they have a massive task to close a £22bn hole in public finances and tough strategies will be needed to rebuild the economy.

British businesses already face the highest tax landscape in history. For manufacturers that are good employers with highly paid roles, Labour’s new Make Work Pay changes will inevitably add additional costs when companies are already strapped for cash. 

Fashion-Enter Ltd’s Founder and CEO, Jenny Holloway comments: “Tomorrow’s budget looks like it will bring yet more tax rises, this time focusing on employer National Insurance Contributions and it is just too much! 

“This will result in companies taking on less people, with some having to let some people go. For large businesses this would amount to millions added onto their wages costs with a NICs rise of 2%.

“As a fashion manufacturer we are already having to cope with massive changes around sustainability which brings with it costs in new equipment and a period of business realignment which takes time. Any additional tax burden now will be the final straw for many of Britain’s smaller companies and will only stifle job creation and growth for the country.”

Prime Minister Keir Starmer and chancellor Rachel Reeves, promised pre-summer election that Labour would not increase the main rates of tax on working people, including income tax and NICs, the nation is poised to hear if the budget tomorrow remains true to that pledge.




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