Employers' Contributions: Small Businesses
The question
To ask the Chancellor of the Exchequer, whether he has made an assessment of the potential impact of lowering the National Insurance contribution threshold to £5,000 on small businesses that employ part time employees.
Answered by James Murray
The Government has taken a number of difficult but necessary decisions on tax, welfare, and spending to fix the public finances.
One of the toughest decisions we took was to raise the rate of employer National Insurance contributions (NICs) from 13.8% to 15%, whilst reducing the per-employee threshold at which employers start to pay National Insurance (the Secondary Threshold) from £9,100 to £5,000.
The Government decided to protect the smallest businesses from these changes by increasing the Employment Allowance from £5,000 to £10,500. This means that next year, 865,000 employers will pay no NICs at all, and more than half of all employers will either gain or will see no change.
A Tax Information and Impact Note (TIIN) was published alongside the introduction of Bill containing the changes to employer NICs, setting out the impact of the policy.
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