Quarter of SMEs consider cutting jobs to cope with Budget fallout – GPA
National Insurance contributions will increase from 13.8% to 15% in April 2025.
Insight from The Global Payroll Association (GPA) revealed that more than a quarter (26%) of small and medium size businesses (SMEs) in the UK are considering a reduction in staff numbers as a result of the Autumn Budget.
The rate of employer Class 1 National Insurance contributions will increase from 13.8% to 15% in April 2025.
The National Living Wage, also known as the National Minimum Wage, will go up in April 2025, led by a 6.7 % increase to £12.21 per hour for over-21s.
Both changes are expected to put significant strain on SMEs as the cost of hiring and retaining employees goes up.
When asked whether the changes to National Insurance will put financial pressure on their business, 29% of SME owners responded ‘yes’.
Meanwhile, 18% of SME owners were more concerned about mandatory wage growth than National Insurance changes.
More than a fifth (21%) of business owners said they were now more inclined to push salary sacrifice arrangements such as pension contributions, and 35% were less inclined to approve pay rises beyond the National Living Wage next year.
42% of owners said they were now less inclined to increase their workforce headcount next year.
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