Changes to Employers National Insurance Contributions for small businesses

From 1 April 2025, significant changes to Employers' National Insurance Contributions (NICs) will impact small businesses in the UK:

• Secondary Threshold Reduction: The annual earnings threshold for secondary Class 1 NICs liability will decrease from £9,100 to £5,000. This means employers will start paying NICs on lower employee earnings.

• Rate Increase: The secondary Class 1 NICs rate will rise from 13.8% to 15%.

• Employment Allowance Expansion: The maximum Employment Allowance will increase from £5,000 to £10,500. Additionally, the restriction preventing employers with over £100,000 in NICs liability from claiming the allowance will be removed. This change aims to provide relief to more businesses.

These updates are designed to support public finances while offering increased relief to smaller businesses through the expanded Employment Allowance.

If you’re reviewing your finances and looking to save costs by investing in automated bookkeeping systems and processes, with the support of a professional, contact us today.