Employers’ National Insurance Increase

Navigating the Employers’ National Insurance Increase: What Bristol Businesses Need to Know

From April 2025, the government is set to increase the rate of National Insurance contributions paid by employers, aiming to address the widely discussed “£22bn black hole.” While the government asserts that these changes won’t directly affect employees’ net pay, the impact on businesses, particularly in areas like Bristol, is significant. As your trusted Bristol Accountants, Dolmans Accountants, we’re here to break down these changes and help you understand their implications.

Understanding the Purpose of National Insurance

National Insurance, introduced in 1911, funds crucial social benefits, including sick pay, state pensions, maternity/paternity pay, and the National Health Service. It’s a vital component of the UK’s social safety net.

Key Changes Effective April 2025

• Increased Employer National Insurance Rate: Currently, employers pay 13.8% on employee earnings above £9,100 per annum. From April 6, 2025, this rate will rise to 15%.
• Lowered Threshold: The earnings threshold will decrease from £9,100 to £5,100, meaning employers will pay National Insurance on a larger portion of their employees’ salaries.

Impact on Bristol Businesses

For a business in the Southwest, where the average salary is £28,748, this change represents a substantial increase. Currently, an employer would pay approximately £2,711.42 in National Insurance. Post-April 2025, this figure will rise to £3,547.20, an additional cost of £835.78 per employee. This increased cost will have a direct impact on the profitability of many businesses in Bristol.

Relief for Smaller Employers: The Employment Allowance

To mitigate the impact on smaller businesses, the government is increasing the Employment Allowance from £5,000 to £10,000 from April 6, 2025. This allowance can be offset against employers’ National Insurance liabilities, potentially eliminating these costs altogether for businesses with liabilities under £10,000 (provided that the payroll is not director only payroll for a limited company).

How Dolmans Accountants Can Help

As experienced Bristol Accountants, Dolmans Accountants understands the complexities of these changes and their potential impact on your business. We can provide:

• Expert payroll management to ensure compliance and accuracy.
• Guidance on maximizing the Employment Allowance.
• Strategic advice on managing increased National Insurance costs.
• Assistance with understanding the impact on your specific business.
• General business advice.

Navigating these changes can be challenging. Don’t hesitate to contact Dolmans Accountants, your trusted Bristol Accountants, for personalised assistance and peace of mind.

Why Choose Dolmans Accountants?

• Local expertise: We understand the unique challenges faced by businesses in Bristol.
• Personalised service: We tailor our services to meet your specific needs.
• Proactive advice: We keep you informed of changes and help you plan for the future.

If you have any questions about the Employers’ National Insurance increase or require assistance with your payroll, please get in touch with Dolmans Accountants, your local Bristol Accountants. We’re here to help your business thrive.