Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Business

UK SMEs eye £4bn NI savings despite looming tax hike

by March 13, 2025
March 13, 2025
UK SMEs eye £4bn NI savings despite looming tax hike

Small and medium-sized enterprises (SMEs) are bracing for a significant rise in National Insurance (NI) contributions after last year’s Autumn Budget, in which Chancellor Rachel Reeves announced higher employer NI rates and a lower threshold from 2025/26.

Although the Treasury expects to raise £25 billion annually to help plug a public finances deficit, concerns are growing that many smaller businesses will struggle with the extra cost — potentially curbing recruitment, wages and even pension contributions.

According to research from Moore UK, employer NI payments by SMEs alone could soar by almost £15 billion, from £54.75 billion to £69.72 billion, covering 16.6 million employees. With 37 per cent of smaller firms citing tax as a principal challenge — and many already operating on thin margins — cost-cutting measures seem likely. Reducing employee benefits or freezing pay are among the most common tactics that businesses employ under financial pressure.

However, a growing number of SMEs are adopting salary sacrifice schemes, which enable employees to exchange a portion of their salary for pension contributions or other non-cash benefits, thereby lowering the overall wage bill subject to NI. Analysts say such schemes could collectively save UK SMEs more than £4 billion annually, offsetting some of the Treasury’s NI increase. Proponents add that salary sacrifice also promotes stronger long-term savings among employees — a key consideration as the UK grapples with a looming pensions shortfall across multiple generations.

Despite these advantages, salary sacrifice remains under-utilised, partly because many business owners are unaware of how straightforward it is to implement. Some industry experts argue the government could do more to highlight salary sacrifice’s potential to reduce employer costs and, simultaneously, bolster employees’ financial security. In times of economic uncertainty, such measures might well be a lifeline for hard-pressed SMEs — and a timely means of easing the looming burden of higher NI charges.

Read more:
UK SMEs eye £4bn NI savings despite looming tax hike

0
FacebookTwitterGoogle +Pinterest
previous post
Federal judge orders Elon Musk, DOGE to reveal plans to downsize government, identify all employees
next post
Taxi firms crowdfund final legal push against Uber over VAT on fares

You may also like

We must make Britain the best place to...

June 12, 2025

Could Nigel Farage really be the UK’s next...

December 27, 2024

Mastercard bans cannabis shops stop accepting debit cards

July 27, 2023

72% of UK firms face skills gaps, turn...

September 13, 2024

9 Reasons to have a travel partner

February 2, 2023

Top Tools Every Small Business Should Invest In...

November 27, 2024

Mortgage approvals lowest in two years after mini-budget...

January 4, 2023

How a positive culture can help your company...

May 15, 2024

UK SMEs brace for average revenue loss of...

November 23, 2024

Vodafone credit card size 5G network could eventually...

February 23, 2023

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • How Staff Can Strengthen HIPAA Compliance and Security

      June 29, 2025
    • Lotus denies plans to close Hethel factory amid US expansion talks

      June 29, 2025
    • Top university degrees lose sway as tech employers prioritise job-ready skills

      June 29, 2025
    • Government urges supermarkets to make healthy food more appealing in bid to tackle obesity crisis

      June 29, 2025
    • Senate Republicans ram Trump’s ‘big, beautiful bill’ through key test vote

      June 29, 2025
    • Chief Justice Roberts sounds alarm on dangerous rhetoric aimed at judges from politicians

      June 29, 2025

    Categories

    • Business (8,334)
    • Investing (2,081)
    • Politics (15,853)
    • Stocks (3,177)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved