IoD Businesses will applaud the realisation that raising employers’ NICs was a mistake
Responding to the announcement that the Government is to reverse the recent rise in National Insurance Contributions, Kitty Ussher, Chief Economist at the Institute of Directors, said:
“Businesses right across the country will be applauding the Government’s realisation that raising employers’ national insurance was a mistake. As the Institute of Directors has consistently and repeatedly argued from the outset, this was quite simply a tax on jobs, which businesses had to pay regardless of whether they are profitable. And the public agreed – the petition we launched at the beginning of the year attracted over 189,000 signatures.
“Many of our members told us that the impact of the increase was that they would have no choice but to push up prices, making inflation even worse. Others said the rise in the cost of employing people meant they would think twice about taking new staff on, or potentially make the difficult decision to let colleagues go. An independent report we commissioned from NIESR confirmed that the tax would reduce the UK’s international competitiveness and hit hardest those parts of the economy that suffered most from the pandemic. And even the Treasury itself said it would have ‘significant macroeconomic impact’.
“Therefore, at a time when business is already facing unprecedented energy and other supply-side costs, this is a hugely important change that can improve the situation for SMEs trying to grow in very difficult circumstances.”
The National Institute of Economic and Social Research (NIESR) paper, ‘The New Employment Tax’, that was part commissioned by the IoD, can be found here.
The #ScrapTheJobsTax petition, that was launched by the IoD, can be found here.