12 November 2024
Navigating the rise in Employer National Insurance Contributions
We understand that the recent increase in employer National Insurance (NI) contributions is a concern for many of you, particularly when many of you are already balancing tight margins and rising costs. Rest assured, though: with the right strategies in place, there’s a clear path forward, and the team at RWB and Longleys are here to support you at every step of the way.
Firstly, let’s ensure you’re making full use of the Employer Allowance, which can reduce your annual NI bill by up to £10,500 from 6th April 2025 (up from £5,000 in the current 2024/25 tax year). This allowance is designed to relieve some of the pressure on small and medium-sized businesses, and we’ll confirm that you’re receiving the maximum benefit possible.
In addition to this, we’ll explore ways to optimize your payroll structure. For owner-managed businesses, we’ll review your salary and dividend arrangements to see where adjustments can help minimize your overall tax burden, ensuring you’re not paying more than necessary in NI.
We’ll also look closely at your workforce structure. In some cases, using flexible options like freelancers or outsourced services can reduce employer NI costs, but it’s important to stay compliant with IR35 regulations. We’ll help you assess your staffing options to make sure you’re protected.
With our support, you can also explore outsourcing specific functions of your business internationally, allowing you to benefit from cost savings while staying true to your commitment to quality. This enables businesses to allocate resources more effectively, focusing on core activities while outsourcing non-core functions. This approach can streamline operations, enhance productivity, and provide flexibility in scaling resources, keeping your business competitive and resilient.
Another way to ease the NI impact is through tax-efficient employee benefits. Salary sacrifice schemes, such as pensions, cycle-to-work programs, or electric vehicle leasing, can reduce taxable income, lowering the NI contributions for both you and your employees. These benefits are not only cost-effective but also valuable for attracting and retaining talent.
Beyond cost-cutting, it’s an ideal time to review growth strategies. Increasing revenue streams or exploring new markets can counteract rising costs and boost overall profitability. We’ll work with you on budgeting and forecasting to support any expansion plans that align with your business goals.
Cash flow is also essential in managing the impact of higher NI costs. Together, we can ensure you have a cash flow plan in place, adjusting forecasts, restructuring debt if necessary, and securing credit where needed to keep your business in a strong position.
We understand that every increase in costs feels like a challenge, but with a proactive strategy and our support, you have the resources to adapt successfully. The RWB and Longleys team are committed to working closely with you, so let’s move forward together with a clear plan to keep your business resilient and thriving.
