How To Beat the 2025 NI Increase: Smart Solutions for Your Bottom Line
How To Beat the 2025 NI Increase: Smart Solutions for Your Bottom Line
With the impending increases in Employer’s National Insurance due to take effect from 1 April 2025 employers across the UK can expect to see a significant impact on costs this year.
Our Finance Director, Duncan Leggat, discusses what these changes might mean for you, and explains what employers can do to reduce the impact on their businesses.?
What are the new changes to Employer National Insurance contributions?
The threshold for which part-time employees’ pay is exempt from Employer’s NI is being reduced from ￡758.00 per month to just ￡417.00.? This will mean that most part-time employees’ pay will be subject to Employer’s NI alongside all employees working 8 hours or more per week, at the new National Living Wage.
These significant increases will obviously lead to a rise in the costs of employing staff and will disproportionately do so for part-time employees, therefore removing some of the advantages of employing part-time staff.
What can businesses do to minimise the impact of the new changes to Employer National Insurance contributions?
Salary sacrifice schemes
By allowing employees to redirect a portion of their salary toward benefits like workplace pensions you can reduce the salary subject to NI and can also help employees avoid higher tax brackets.
Review your budgets and pricing
Ensure your budgets and pricing incorporate the increased Employer’s NI costs.?
Could you increase your prices to pass on some of the cost to your customers?? The challenge here is that your clients will already have additional costs to cover for their own employees.? A balanced approach is required to avoid any negative impact on your client base. Such actions in the economy will produce inflationary pressures for all.
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Review recruitment and working hours
Many businesses will recruit fewer new employees and be less keen to replace leavers in a bid to counteract these increases. Whilst this may be a real challenge where employees are already stretched, any efficiencies that can be gained by reviewing working practices could result in a lower impact of higher NI costs.
Outsource your employee workload
Various back office and front-of-house activities can be outsourced to allow your existing team to focus on core activities and avoid the need to employ additional staff.
By using a telephone answering service like Cymphony, your calls and webchats will be answered by professional, well trained, UK based agents who will represent your business just as effectively as your internal team, but without the costs of recruitment, training, and the NI increases.
Services like Cymphony also reduce the need for office space, reception staff, and can even provide you with admin and virtual assistant services, ensuring that your business remains as efficient as possible, even with the new costs we are all facing.? Additionally, your clients will receive an unrivalled customer experience, you won’t miss calls, and will capture every new opportunity, without risking additional costs for increasing the size of your internal team.
Crucially, you will only be paying for the time that you use rather than the entire shift which may include idle time. With the significant impending increases for employers, it is becoming a real luxury to be able to afford to pay for idle time, but it is avoidable without the need to compromise on the quality of services by outsourcing to providers like Cymphony.
What can businesses do to minimise the impact of the new changes to Employer National Insurance contributions – a summary
·?????? Introduce salary sacrifice schemes
·?????? Review your budget and pricing
·?????? Review recruitment and working hours
·?????? Use a telephone answering service like Cymphony
Ready to take action?
Our team at Cymphony is here to help you navigate the upcoming NI changes. Contact Us Now - Let’s work together to build a stronger, more resilient future for your business.