National Insurance hike will force businesses to raise prices and hire fewer staff, new data shows
- 29% of business leaders say they will have to raise prices due to higher taxes
- And 15% will employ fewer people in response to the National Insurance increase
- NI will increase by 1.25 percentage points for workers and businesses this month
Businesses will raise prices and employ fewer staff to offset the impact of the National Insurance hike, the figures show.
Almost one in three business leaders – 29% – surveyed by the Institute of Directors (IoD) said they will have to raise prices because of higher taxes.
And 15% will employ fewer people in response to the 1.25 percentage point rise this month for workers and businesses.
Along with rising taxes, soaring energy bills will put additional pressure on struggling businesses and families.
A separate IoD survey found that more than half of business leaders said the cost of energy had a negative impact on their organization – three times as many as last year.
Last week Rishi Sunak announced he would raise the threshold at which people would start paying £3,000 NI dues from July to help those on low incomes. (Pictured: The Chancellor before his Spring Statement at 11 Downing Street)
Kitty Ussher, chief economist at IoD, said the government’s decision to go ahead with the jobs tax was “pushing inflation even further, and at the worst possible time”.
Last week, Chancellor Rishi Sunak announced he would increase the threshold at which people start paying £3,000 NI dues from July to help those on low incomes.
But the Daily Mail and economists said it should have scrapped NI’s rise altogether.
Kitty Ussher, pictured, chief economist at IoD, said the government’s decision to go ahead with the jobs tax is ‘pushing inflation even further, and at the worst possible time’ .
Ms Ussher said: “It’s understandable that companies have no choice but to raise prices due to international energy costs and other supply issues, but our data now shows that the The government’s own decision to go ahead with the jobs tax is also in itself pushing inflation even further, and at the worst possible time.
“For some companies, it also forces them to hire fewer people.
“This is a deliberate policy choice and makes life even more difficult for households facing spiraling costs.”