Rising employment taxes hit UK hiring
Rising employment taxes are making UK businesses think twice about hiring 💼
If you’re finding it harder to justify taking on new staff lately, you’re not alone.
Nearly half of UK businesses are now rethinking their recruitment plans thanks to a rise in employment taxes and overall labour costs. According to new research by Reed, 46% of employers say the recent increase in National Insurance Contributions (NICs) is directly affecting their hiring decisions.
From April 6th, the rate employers pay on NICs jumped by 1.2 percentage points, while the threshold before you start paying dropped to £5,000. That’s a double hit—especially for labour-heavy sectors like hospitality and retail, where part-time staff and tight margins are common.
Out of 254 businesses surveyed (together employing over 260,000 people), the average predicted hit to annual profits was a whopping 29%. That’s not small change.
So what are businesses doing in response?
- 27% are putting hiring plans on hold
- 19% are postponing or cancelling pay reviews
- 16% are making redundancies
It’s clear the increased financial pressure is forcing many to make tough decisions.
These tax changes were designed to boost public finances, but without extra support, it’s becoming harder for many to grow—or even maintain—their current workforce.
If your business is feeling the squeeze, don’t suffer in silence. We can help you take a closer look at your costs, staffing, and tax planning to figure out the best way forward.
