Last reviewed 26 May 2022

Research carried out by the British Chambers of Commerce (BCC), of more than 1100 UK employers, has uncovered what it describes as a series of negative impacts from the recent increase in National Insurance (NIC) contributions.

Firms said that not only had the rise in employer contributions to National Insurance from 13.8% to 15.05% increased staffing costs, and forced some to put up their prices, but it also meant they would be limiting their investments.

To give businesses a chance to keep a lid on rising prices, boost productivity and ease cost pressures, the BCC is calling for the rise to be immediately reversed for at least a year, as firms battle surging costs on multiple fronts.

BCC Co-Executive Director Hannah Essex said: “Businesses are telling us that the rise in National Insurance contributions has been a body blow as they try to get back on their feet. When firms are already facing a toxic mix of surging inflation, rising energy costs and supply chain disruption, this increase is very hard to swallow.”

The BCC has issued details of the survey as part of its call for an Emergency Budget at which it wants the Chancellor to cut VAT on business energy bills from 20% to 5% for a minimum of one year and to address labour shortages by reinstating free Covid tests for companies, to ease the strain on productivity caused by persistent high absences.

“The costs crises facing firms and people in the street are two sides of the same coin,” Ms Essex argued. “If we can ease the pressure on businesses, then they can keep a lid on the price rises.”

Announced last year by Prime Minister Boris Johnson, the increase in NICs came into force in April 2022 and is intended to help the Government to fund health and social care costs.