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The Chancellor’s Pre-Budget Report was not all about boilers and bingo as he also announced that (if they are re-elected), employers’ and employees’ National Insurance contributions are both to rise by 0.5% in April 2011. A rise of 0.5% is already on the cards from April 2010 too.

 

With the increasing tax burden on employing people, employers may want to consider ways of mitigating the additional employer’s NIC. A shift to providing some benefits to staff in return for making a salary sacrifice could help reduce the amount of remuneration on which employers (and employees) pay National Insurance Contributions. This may be worth looking into for some employers. It is likely to involve revising staff contracts as part of the process.

 

These additional costs may also mean looking around for savings elsewhere. Whether it is pay reduction, re-negotiating bonuses or encouraging more flexible working arrangements. If you are interested in exploring the options available to employers, please call Rochman Landau’s employment team.