{"id":127578,"date":"2026-10-25T11:15:00","date_gmt":"2026-10-25T11:15:00","guid":{"rendered":"https:\/\/en.econostrum.info\/uk\/?p=127578"},"modified":"2026-10-25T08:50:16","modified_gmt":"2026-10-25T08:50:16","slug":"the-national-insurance-squeeze-businesses","status":"publish","type":"post","link":"https:\/\/en.econostrum.info\/uk\/the-national-insurance-squeeze-businesses\/","title":{"rendered":"The National Insurance Squeeze: Why Some UK Businesses Are Putting New Jobs on Hold"},"content":{"rendered":"\n

Businesses in Devon are delaying recruitment as higher National Insurance contributions and minimum wage increases put pressure on staffing budgets. With another Budget approaching, employers are calling for tax relief to support recruitment and growth.<\/p>\n\n\n\n

Companies across Devon have raised concerns about the cost of employing staff, with some postponing plans to expand their workforce. At the Devon Business Show<\/strong> in Plymouth, business owners described how rising employment expenses were affecting recruitment decisions.<\/p>\n\n\n\n

Their concerns come ahead of Chancellor John Healey\u2019s first Budget<\/strong>, with potential tax increases still on the table. Hospitality businesses are also seeking changes to VAT, arguing that existing costs are placing pressure on their operations and customers.<\/p>\n\n\n\n

Rising National Insurance Costs Leave Businesses Reluctant To Recruit<\/strong><\/h2>\n\n\n\n

According to BBC reporting from the Devon Business Show, several employers have struggled with higher National Insurance contributions and increases in the National Minimum Wage over the past two years. Tim Randell,<\/strong> who runs Links Publishing in Tavistock, said employment costs had prevented him from filling two available positions. Although he wants to expand his business, he remains reluctant to take on additional staff.<\/p>\n\n\n\n

\n

“I have two positions that I could fill, want to fill, want to expand and grow my business, but I’m holding back because of the employment costs<\/em>,” he said.<\/p>\n<\/blockquote>\n\n\n\n

The changes introduced in the 2024 Autumn Budget<\/a> increased the employer National Insurance rate from 13.8% to 15% from 6 April 2025. The annual earnings threshold at which employers become liable for contributions also fell from \u00a39,100 to \u00a35,000.<\/p>\n\n\n\n

The legal minimum wage for workers aged 21 and over increased from \u00a311.44 to \u00a312.21 an hour in April 2025, adding another consideration for businesses managing staffing costs.<\/p>\n\n\n\n

According to HM Revenue & Customs<\/a>, approximately 940,000 employers were expected to face higher National Insurance liabilities under the reforms, while around 250,000 were expected to see reductions and 820,000 no change.<\/p>\n\n\n\n

The government also increased the Employment Allowance from \u00a35,000 to \u00a310,500 and removed the previous \u00a3100,000 eligibility threshold, extending relief to more eligible employers.<\/p>\n\n\n\n

Michelle Bunker, from Plymouth-based WGP Maintenance, called for employer National Insurance contributions to fall. Kevin Miller, who runs Apex HR, similarly urged the government to offer tax relief to businesses seeking to recruit and expand.<\/p>\n\n\n\n

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Rising National Insurance costs leave UK firms delaying recruitment and calling for tax relief. \u00a9Canva<\/em><\/figcaption><\/figure>\n\n\n\n

Hospitality Businesses Press for Lower VAT As Financial Pressures Continue<\/strong><\/h2>\n\n\n\n

Hotels, pubs and restaurants are facing their own difficulties, with industry representatives calling for a reduction in VAT <\/a>from 20% to 10%.<\/p>\n\n\n\n

According to the BBC<\/a>, hospitality businesses <\/strong>attending the Devon Business Show reported difficult trading conditions, while hotel managers argued that lower VAT could benefit both customers and operators.<\/p>\n\n\n\n

Pete Adams, general manager of Plymouth’s Moxy Hotel, said reducing VAT would allow businesses to pass some savings on to customers, potentially encouraging more spending. Melanie Williams, events manager at the Duke of Cornwall Hotel, also suggested that the government reconsider VAT rates to support the industry.<\/p>\n\n\n\n

The campaign<\/strong>, spearheaded by chef Tom Kerridge under the name #VATsTheProblem, had attracted 411,647 petition signatures calling for hospitality VAT to fall to 10%.<\/p>\n\n\n\n

Financial pressure extends beyond commercial businesses. Elsbeth Hallam, from Plymouth-based Hugs Children’s Cancer Charity, said tighter household spending was affecting fundraising and the number of families the organisation could support. HM Treasury maintained that the government was supporting businesses through business rates reductions, corporation tax limits and employment-related reliefs. It said decisions on taxation would be announced through formal fiscal events.<\/p>\n","protected":false},"excerpt":{"rendered":"

Businesses are sounding the alarm over rising National Insurance costs, with some putting recruitment plans on hold. As the Budget approaches, employers are calling for relief, raising questions about what the Chancellor will announce.<\/p>\n","protected":false},"author":10,"featured_media":127581,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[44],"tags":[],"class_list":["post-127578","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33","no-featured-image-padding"],"_links":{"self":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts\/127578","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/comments?post=127578"}],"version-history":[{"count":2,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts\/127578\/revisions"}],"predecessor-version":[{"id":127582,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts\/127578\/revisions\/127582"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/media\/127581"}],"wp:attachment":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/media?parent=127578"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/categories?post=127578"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/tags?post=127578"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}