Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+

Personnel Today

Register
Log in
Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+

Latest NewsEconomics, government & business

National insurance contribution rise plans labelled ‘madness’

by Kat Baker 10 Dec 2009
by Kat Baker 10 Dec 2009

Plans to raise national insurance contributions (NIC) by a total of 1% in October 2011 are “madness” and amount to a “tax on jobs” that will hamper attempts to increase employment, employer groups have warned.

In the Pre-Budget Report (PBR) yesterday, chancellor Alistair Darling announced that NIC for both employers and staff would increase by 0.5% in October 2011 – this comes on top of a previous 0.5% increase for October 2011, first revealed in the PBR 2008.

Charles Cotton, reward adviser at the Chartered Institute of Personnel and Development, said: “This tax on jobs will hit at a time when we are still likely to be in the early stages of a ‘jobs light’ economic recovery – this is not the tonic a sickly labour market needs.”

The CBI’s director-general, Richard Lambert, added: “The chancellor has made a serious mistake imposing an extra jobs tax at a time when the economic recovery will still be fragile.

“Increasing national insurance contributions will hold back job creation and growth.”

Stephen Robertson, director-general of the British Retail Consortium, described the chancellor’s announcement as “madness”, saying the government should be scrapping the already announced NIC hike rather than raising it further.

He said: “This is madness. The new threshold will help some, but the chancellor should have said he’s scrapping the increase already announced, not adding to it. This makes it more expensive for all businesses to maintain and create jobs, but is particularly bad for retail because it is such a big employer.”

The rate of employers NIC was set to increase from 12.8% to 13.3% in 2011, but yesterday’s announcement will now see this rise further to 13.8%.

Ellie Gamble, senior tax manager at accountancy firm Grant Thornton, said: “It is disappointing that the government did not take this opportunity to think more creatively about the options available, which could have included a rebate or holiday for NICs when a job was offered to bring someone back into the workforce.”

Sign up to our weekly round-up of HR news and guidance

Receive the Personnel Today Direct e-newsletter every Wednesday

OptOut
This field is for validation purposes and should be left unchanged.

For an employee earning £50,000 a year, the latest proposal would mean an increase in national insurance of £5.46 per week or £283.80 per annum. For their employer, it would mean an increase of £8.26 per week or £429.55 per annum, according to Matt Ellis, an employment tax partner at business consultancy firm Deloitte.

He added: “Undoubtedly, many employers will try to mitigate the impact of this rate increase by using salary sacrifice arrangements, to ensure that the overall pay and benefits package is more tax efficient.”

Kat Baker

previous post
University of Surrey ordered to pay male academic £18,000 over sex discrimination
next post
National insurance rise plan will leave NHS with tax bill of £450m, claim Tories

You may also like

Restaurant tips should be included in holiday pay

21 May 2025

Fewer workers would comply with a return-to-office mandate

21 May 2025

Redefining leadership: From competence to inclusion

21 May 2025

Pay awards in real terms could fall for...

21 May 2025

Ryanair demands flight attendants pay back salary increase

21 May 2025

Consultation launched after Supreme Court ‘sex’ ruling

20 May 2025

Uncertainty over law hampering legal use of medical...

20 May 2025

Black security manager awarded £360k after decade of...

20 May 2025

Employers ‘worryingly’ ignorant about stress risk assessments

20 May 2025

UK and EU agree to collaborate on ‘youth...

19 May 2025

  • 2025 Employee Communications Report PROMOTED | HR and leadership...Read more
  • The Majority of Employees Have Their Eyes on Their Next Move PROMOTED | A staggering 65%...Read more
  • Prioritising performance management: Strategies for success (webinar) WEBINAR | In today’s fast-paced...Read more
  • Self-Leadership: The Key to Successful Organisations PROMOTED | Eletive is helping businesses...Read more
  • Retaining Female Talent: Four Ways to Reduce Workplace Drop Out PROMOTED | International Women’s Day...Read more

Personnel Today Jobs
 

Search Jobs

PERSONNEL TODAY

About us
Contact us
Browse all HR topics
Email newsletters
Content feeds
Cookies policy
Privacy policy
Terms and conditions

JOBS

Personnel Today Jobs
Post a job
Why advertise with us?

EVENTS & PRODUCTS

The Personnel Today Awards
The RAD Awards
Employee Benefits
Forum for Expatriate Management
OHW+
Whatmedia

ADVERTISING & PR

Advertising opportunities
Features list 2025

  • Facebook
  • Twitter
  • Instagram
  • Linkedin


© 2011 - 2025 DVV Media International Ltd

Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+