Business groups unite to slam NIC hikes

Leading business groups are lobbying the government to retract its 1 per cent increase in National Insurance Contributions.


Leading business groups are lobbying the government to retract its 1 per cent increase in National Insurance Contributions.

Leading business groups are lobbying the government to retract its 1 per cent increase in National Insurance Contributions planned for next April.

In a letter of petition bodies such as the British Chambers of Commerce (BCC), Forum of Private Business and Federation of Small Businesses (FSB) are urging the government to rethink the hike, describing it as a ‘tax on jobs’ which ‘will discourage companies of all sizes from taking on new staff at a critical point in our economic recovery.’

John Wright, chairman of the FSB, says: ‘[We are] calling on the government to take steps to make it easier for the country’s 4.8 million small firms to employ staff. The FSB knows that small firms want to recruit over the coming year, but are put off by taxes. The government can give the economy a real helping hand by freezing National Insurance and helping to encourage small firms to grow and take on additional employees.’

David Frost, director general of the BCC, says: ‘Raising a damaging tax on business, like NICs, will be counter-productive. It will mean fewer jobs and less tax revenue in the long-term.’

According to the FSB, some 57,000 jobs in the SME sector could be lost as a result of the rise, while the Chartered Institute for Personnel and Development predicts that the tax increase could mean 12 per cent of employers will take on fewer staff and 8 per cent will cut jobs.

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