Businesses warn of National Insurance 'powder keg'

The overwhelming majority of businesses say the rise in employers' NICs will force them to change their plans, according to research by the British Chambers of Commerce (BCC).

With under six weeks until the NICs rise comes in, 82% of firms say the tax hike will cause them to rethink. In addition, 58% of surveyed businesses say it will impact recruitment plans, and 54% that it will affect their prices.

Meanwhile, more than a third of firms suggest investment and day-to-day operations will be impacted.

Alex Veitch, Director of Policy at the British Chambers of Commerce said:

'The clock is ticking down to the NICs rise, and firms are already telling us they are sitting on a powder keg of costs.

'The government has pledged to retain the NICs tax position through the life of this parliament, but our new evidence should give pause for thought. We need the government to publish a wider tax roadmap for business, setting out the direction of travel for costs like NICs and business rates.

'Business rate reform must be an urgent priority, creating a system that incentives investment. Getting on with planning and skills reforms will also remove blockers to growth.'

Internet link: BCC