Skip to main content
Helping your business to Start, Grow and Develop.

Search

For a successful business, you need a viable business idea, the skills to make it work and the funding. Discover whether your idea has what it takes.

Forming your business correctly is essential to ensure you are protected and you comply with the rules. Learn how to set up your business.

Advice on protecting your wellbeing, self-confidence and mental health from the pressures of starting and running a business.

Learn why business planning is an essential exercise if your business is to start and grow successfully, attract funding or target new markets.

It is likely you will need funding to start your business unless you have your own money. Discover some of the main sources of start up funding.

Businesses and individuals must account for and pay various taxes. Understand your tax obligations and how to file, account and pay any taxes you owe.

Businesses are required to comply with a wide range of business laws. We introduce the main rules and regulations you must comply with.

Marketing matters. It drives sales and helps promote your brand and products. Discover how to market your business and reach your target customers.

Some businesses need a high street location whilst others can be run from home. Understand the key factors from cost to location, size to security.

Your employees can your biggest asset. They can also be your biggest challenge. We explain how to recruitment and manage staff successfully.

It is likely your business could not function without some form of IT. Learn how to specify, buy, maintain and secure your business IT.

Few businesses manage the leap from start up to high-growth business. Learn what it takes to scale up and take your business to the next level.

National Insurance rise impacts small business hiring plans

18 March 2025

New research suggests that the impending rise in employer National Insurance Contributions in April will affect at least eight in ten small businesses and many firms say they are planning to reduce their headcount as a result.

A survey of business owners by small business lender iwoca has found that 22% of the UK's 1.4 million SME employers plan to reduce headcount in order to cope with higher employer National Insurance contributions (NICs) that come into effect in April. It means over 300,000 SMEs could cut jobs because of the NIC hike.

Two-thirds (66%) of SME leaders estimate that the higher NICs rate will cost them each over £10,000. As a result, 35% of firms polled said they will slow hiring plans and 59% say they expect to increase prices. Employees who remain on the payroll of small and medium-sized businesses are also expected to feel the pinch:

  • 31% of firms expect to reduce pay rises.
  • 27% say they'll have to delay promotions.

While the government has increased the employment allowance to help offset the higher NICs rate, 28% of SMEs say the measure will not provide sufficient relief. This exceeds the 21% who believe the allowance will significantly offset the additional costs.

"Based on our survey, rising employer NICs are likely to result in slower wage growth and job losses among SMEs. While the increase in employment allowance provides some relief, higher costs overall could limit SMEs' ability to invest and grow - and that's something we need them to do to help boost economic growth in the UK." Seema Desai, chief operating officer at iwoca.

Without the NIC increase, 33% of SME leaders say they would invest more in their businesses or lower prices - stimulating growth instead of stalling it.

Small firms sitting on a "powder keg of costs"

The British Chambers of Commerce (BCC) has described the situation as "a powder keg of costs" for small businesses. Its recent poll of 1,200 firms (conducted in partnership with AAB) has found that 82% of businesses say the National Insurance (NI) rise will affect them. Furthermore, a worrying 58% say it will impact recruitment and 54% say it will affect prices.

"The clock is ticking down to the National Insurance rise, and firms are already telling us they are sitting on a powder keg of costs. Most are saying they will have to raise prices and reconsider recruitment plans. That's unlikely to create an environment that fosters growth, the key priority for government. Ministers need to read the room and recognise the impact this tax hike will have." Alex Veitch, director of policy at the British Chambers of Commerce.

However, the squeeze on recruitment was not in evidence earlier this year, according to new data published by QuickBooks. Its analysis suggests that employment at UK small firms with 1-9 employees increased by 6,000 jobs in February compared to January. However, while the overall number of job vacancies at small businesses slightly increased in February, job vacancies fell in nine out of 12 UK regions, which may be a taste of things to come.

Pauline Green, international head of compliance at Intuit QuickBooks, has warned that businesses must prepare for rising costs in the new tax year: "As businesses look to expand, they must be mindful of potential new financial pressures they may need to accommodate. With upcoming increases to Employer National Insurance and the National Minimum and Living Wage, business owners must manage their payroll costs effectively. With the new tax year approaching, now is the time for small businesses to review budgets, plan for higher expenses and make informed hiring decisions to protect both growth and stability.''

Written by Rachel Miller.

Stay up-to-date with business advice and news

Sign up to this lively and colourful newsletter for new and more established small businesses.