Plan ahead for changes to Employers' National Insurance

National Insurance - big changes are coming very soon

Date: 10th February 2025

Subject: Changes to Employers’ National Insurance and the Employment Allowance

The labour government’s first budget has been widely analysed, so in this briefing we are focussing on changes to employers’ class 1 national insurance rates, the threshold at which these kick in, and the employment allowance – all of which will be changing from 6th April 2025

Here’s what will change from 6th April 2025:

·         The main rate for employers’ national insurance will rise from 13.8% to 15%

·         The secondary threshold is the point at which employers’ national insurance starts to be paid. This is going down from £9,100 per year to £5,000 per year. Or in monthly terms from £758 to £416

·         One sweetener for small businesses is the increase in the employment allowance, which will rise from £5,000 to £10,500

Urgent points:

·         Our more organised clients have been asking us what effect the changes will have on them

·         Our calculations for this often come up with no effect

·         However this is not the case for everyone, we had one example of the cost of the changes being equal to the entire profit of the business

·         It is essential to know what your costs will be, we are now just two months away from the changes

·         Please spend ten minutes on our online national insurance calculator and you will get an instant result, and you can book a call with us if you need more detailed calculations or help

Summary:

Don’t go into the new tax year without clear detail on your costs going forwards. Once you understand your costs you will be able to make decisions to mitigate any increases – such as staffing levels, pricing, operating overheads. The first step is always to understand your costs.

About the author

Dr Roger Clough, founder

Roger has a PhD in UK food retail change, has lectured extensively in business finance and accounting, and has run several businesses over three decades. As an AAT Licensed Accountant he likes to be on a journey with clients rather than the kind of accountant who just prepares the statutory accounts after the year end – meaning that advice can be given and decisions can be made before it is too late.

About Clough Accounting

t           01736 605124

e          roger@cornwall-accountants.co.uk

w         www.cornwall-accountants.co.uk

Roger Clough t/a Clough Accounting is an AAT Licensed Accountant

© Clough Accounting, 2025