(qlmbusinessnews.com Thurs. 31st Oct, 2024) London, UK —
Rising National Insurance Rates for Employers – How Will It Impact UK Businesses?
The UK government has announced an increase in the National Insurance (NI) rate that employers will need to pay, starting in April 2025. Currently, businesses pay NI at 13.8% on employees’ earnings above a £9,100 annual threshold. This rate will increase to 15%, and the earnings threshold will drop to £5,000, effectively raising the cost burden on employers.
The Chancellor has confirmed that while NI rates for individual workers and the self-employed will remain unchanged following cuts in 2024, the government’s recent adjustments in tax thresholds mean some people are still seeing an overall increase in their NI and tax contributions. National Insurance, a key component of the UK’s social welfare funding, supports public services, including the NHS and certain benefits. Workers contribute based on their earnings, while the self-employed pay Class 4 NI on income between £12,570 and £50,270, which recently dropped from 9% to 6%.
For income tax, basic rate taxpayers currently pay 20% on earnings between £12,571 and £50,270, while those earning above that threshold face a higher 40% rate. The additional rate of 45% applies to earnings over £125,140. Scottish residents are subject to slightly different income tax brackets, with the top rate now set at 48%.
The government has also chosen not to extend a freeze on tax thresholds until 2030, meaning current levels will remain in place until 2028. This freeze has meant that as wages increase, so does the number of individuals moving into higher tax brackets, an effect known as ‘fiscal drag.’
In the longer term, the increase in employer contributions and the frozen income thresholds will mean some employers face more significant cost pressures. Some are raising concerns over the impact these rising costs will have on hiring and job creation.
This News Story is brought to you by QLM Business News, your Digital Media Channel
Visit QLM businessnews.com
For more business news stories also follow us on Facebook, X and Youtube.
To Help qlm business news bring you more new stories like this, please like, share and subscribe.
Unlock unparalleled business growth and effortlessly attract a stream of new customers through QLM Business News Sponsored Advertising. Elevate your brand's presence and captivate your target audience with precision. Visit QLMbusinessnews.com and click on “Advertise” to harness the power of strategic advertising. Don't miss this unparalleled opportunity to propel your business to new heights of success!
Disclaimer: All images presented herein are intended solely for illustrative purposes and may not accurately depict the true likeness of the subjects, objects, or individuals referencted in the accompanying news stories.
