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The NI changes are going to cost my organisation £1000 per employee

542 replies

flashbac · 01/11/2024 06:41

The NI changes are going to cost my organisation on average £1000 per employee, The lowering of the threshold alone is going to cost around £600 extra per employee.

We are heavily regulated with fixed income. We're a not for profit. Our customers expectations are increasing. We are now most likely going to have to somehow reduce our headcount now, and payrises for April are going to be off the table.

Just shaking my head really. Our employees don't deserve this. Hard to see how this isn't a tax on jobs.

The lowering of the threshold also means employers have to pay for more workers, because part time salaries are now dragged into it.

A lot of people reading this won't care. All I can say is this NI increase will also affect you. just think about Local authorities, childcare providers and other services. Do you think it won't affect your Councils services/tax bills, to give one example?

(I'm not a Tory bot btw, before anyone starts accusing me of being one. I voted Remain, don't support the Tories at all, can't stand Boris and his cronies.)

OP posts:
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TheTidyBear · 01/11/2024 10:47

AnonymousBleep · 01/11/2024 10:44

Yes. And I've been made redundant several times as I work in a sector with little job security. I've learned to be resilient and have savings to fall back on. Like many people I also have several 'side-hustles' on the go. (Most o this happened under the Tories btw - under the last Labour government my sector was paid far better than it is now, although to be fair was still pretty insecure). Private individuals and businesses don't operate in the same ways, but there are some similarities for sure.

Businesses, on the whole, care about profits and not people. I've experienced that first hand. So I do think there's quite a lot of disingenuity in some of the hand-wringing on this thread tbh.

Edited

And yet you've said it's fair and 'just business' for non-profits like Nuffield Health to shoulder more of the burden than a tech company like Sage making half a billion a year.

RedToothBrush · 01/11/2024 10:47

ACynicalDad · 01/11/2024 10:38

We're a charity, but the cost is small for us, but it really hits those with lots of lower paid staff rather than less higher ones. Surely a higher rate on jobs paying over say £50k would suit their aims better. Still I don't think you can tax your way to growth and I fear stagnation.

This is what really gets me.

It's supposed to be a labour budget.

But the people it's fucking over are not the ones that make any sense whatsoever.

It's a middle class pleasing budget to virtue signal.

Not one that makes things better for the working poor or those on benefits.

TheTidyBear · 01/11/2024 10:44

Didimum · 01/11/2024 10:37

No, it's the 'please provide evidence for your claim' and 'so you don't have evidence then'. I'm not being prosecuted in a court of law, and this way of speaking to people is straight out of the MN condescension playbook. I'm am not willing to engage positively with these sorts of responses.

Fair enough. Some of us see it differently and not 'aggy'. Like, if you decide to go onto a forum and post an opinion on a topic as serious as this one, then why bother if you're not going to back it up. Why not just go and talk about movies or something,

AnonymousBleep · 01/11/2024 10:44

EasternStandard · 01/11/2024 10:38

You may welcome tax rises, I'm guessing Labour still have mileage with various people to keep hiking taxes, even if the markets do not and we'll pay more on debt.

But surely you don't welcome redundancies or lower pay? Are you employed?

Edited

Yes. And I've been made redundant several times as I work in a sector with little job security. I've learned to be resilient and have savings to fall back on. Like many people I also have several 'side-hustles' on the go. (Most o this happened under the Tories btw - under the last Labour government my sector was paid far better than it is now, although to be fair was still pretty insecure). Private individuals and businesses don't operate in the same ways, but there are some similarities for sure.

Businesses, on the whole, care about profits and not people. I've experienced that first hand. So I do think there's quite a lot of disingenuity in some of the hand-wringing on this thread tbh.

RedToothBrush · 01/11/2024 10:44

Diaryfear · 01/11/2024 10:28

How many people do Parish Council employ?

Do not get me started on this. Our parish is so badly run with the people who actually benefit the parish being sacked in favour of paper pushers.

I know the figures for our parish and it's outrageous how much piss taking is going on and how few in our parish are aware that a quarter of the money the parish tax raises is being pissed up the wall.

Didimum · 01/11/2024 10:42

ACynicalDad · 01/11/2024 10:38

We're a charity, but the cost is small for us, but it really hits those with lots of lower paid staff rather than less higher ones. Surely a higher rate on jobs paying over say £50k would suit their aims better. Still I don't think you can tax your way to growth and I fear stagnation.

Yet everyone also kicked off when it was suspected a further freeze of the tax thresholds was in the offing – which didn't materialise. There is no winning budget here.

dottiehens · 01/11/2024 10:40

The way I see if that Labour is destroying the few things left that were working fine. They really are either clueless o with a very hard left agenda. The easy to manipulate people can’t even comprehend the damage Labour budget is doing to the country.

ElaborateCushion · 01/11/2024 10:40

AnonymousBleep · 01/11/2024 10:22

The OP must be on a salary of around £70K for the employer to be paying £1000 extra a year in NI contributions. It's hard to imagine that everyone in charities/not for profits is on that kind of money tbh. I'm in the private sector, in an SME, and the cost to the employer won't be anything like that per employee.

Not the case. Ignoring the increase in employment allowance, a £1,000 increase in e'ers NI kicks in at around £42,000 of gross earnings.

Bromptotoo · 01/11/2024 10:40

Apologies if this has been answered but what are the salaries of the employees in respect of whom the extra £1,000 each arises?

FlyMeToPluto · 01/11/2024 10:40

@mrshoho yes we were and I'd rather keep that in for my employees than cut that and hire more people if that makes sense. You're right, the other option is not increasing salaries as much.

The threshold dropping has a big impact too.

TheTidyBear · 01/11/2024 10:39

AnonymousBleep · 01/11/2024 10:36

Why do you think I'd be the first to complain?

The ad hominem attacks in so many of these posts suggest the points being made are BS.

Because that's what any reasonable person would do.

Hardly an ad hominem to call you reasonable is it.

EasternStandard · 01/11/2024 10:38

AnonymousBleep · 01/11/2024 10:36

Why do you think I'd be the first to complain?

The ad hominem attacks in so many of these posts suggest the points being made are BS.

You may welcome tax rises, I'm guessing Labour still have mileage with various people to keep hiking taxes, even if the markets do not and we'll pay more on debt.

But surely you don't welcome redundancies or lower pay? Are you employed?

ACynicalDad · 01/11/2024 10:38

We're a charity, but the cost is small for us, but it really hits those with lots of lower paid staff rather than less higher ones. Surely a higher rate on jobs paying over say £50k would suit their aims better. Still I don't think you can tax your way to growth and I fear stagnation.

Didimum · 01/11/2024 10:37

TheTidyBear · 01/11/2024 10:28

What was 'aggy' about their post?

Is it 'aggy' when someone posts a reasoned opinion on here?

No, it's the 'please provide evidence for your claim' and 'so you don't have evidence then'. I'm not being prosecuted in a court of law, and this way of speaking to people is straight out of the MN condescension playbook. I'm am not willing to engage positively with these sorts of responses.

Jellycatspyjamas · 01/11/2024 10:37

Well it’s quite simple. The threshold has dropped from £9,100 to £5000. So every single employee immediately costs 15% of £4,100 more. That’s £615. Not £210. And for someone on the average UK salary of £35k, there’s also another 1.2% on £25,900. So that’s another £310. So the average employee now costs just under £1k more.

Thank you @Tryingtokeepgoing my maths isn’t working this morning - good job I don’t rely on being able to count in my work.

ElaborateCushion · 01/11/2024 10:37

ElaborateCushion · 01/11/2024 10:36

Hopefully this screenshot works.

Even at minimum wage, the changes will cost an extra £782 in NI.

The employment allowance has been increased, but for businesses employing lots of people that's a drop in the ocean compared to the costs.

Sorry - screenshot didn't paste like it suggested and I can't edit it to add.

The NI changes are going to cost my organisation £1000 per employee
AnonymousBleep · 01/11/2024 10:36

TheTidyBear · 01/11/2024 10:33

I'm sure if they did an income tax raise across all salary bands you'd be the first to complain.

But when they do a blanket tax raise across all industries which impacts struggling sectors which don't make huge profits from automation, then it's apparently it's fair and just business.

Here's news for you, it's also 'just business', to make you redundant and reduce your salary. And that's what will be happening to a lot of people in these sectors, which won't result in any money being raised.

Why do you think I'd be the first to complain?

The ad hominem attacks in so many of these posts suggest the points being made are BS.

ElaborateCushion · 01/11/2024 10:36

mrshoho · 01/11/2024 10:12

Could you tell us how you've worked out this cost please.

Hopefully this screenshot works.

Even at minimum wage, the changes will cost an extra £782 in NI.

The employment allowance has been increased, but for businesses employing lots of people that's a drop in the ocean compared to the costs.

Tryingtokeepgoing · 01/11/2024 10:35

mrshoho · 01/11/2024 10:26

Thank you, my brain is not in gear this week and trying hard to understand these additional costs.

Ignore the answer you’ve been given. It’s wrong. The additional employers NI for an employee paid £70,000 is 1.2% of the difference between the old threshold and £70k. So 1.2% of £60,900, which is £730. Plus 15% of the difference between the new and old threshold, which is 15% of £4,100. Another £615. A total of £1,345

taxguru · 01/11/2024 10:34

HotTopicsWithImogen · 01/11/2024 10:31

That's a shame.

Could you cut your own wage down, at all, to help fund this?

I'm sure you're aware that your own employees have been, collectively, cutting back for years.

Presumably you'd say the say to the GPs who are typically partners in their own practices (which ARE private businesses) when they claim they can't afford to recruit staff to treat their patients hence the ever lengthening delays and difficulty in getting appointments! After all, it's just the same, isn't it?? If you think the business owner must always take a pay cut so that they can pay their staff and provide services to their "customers".

EasternStandard · 01/11/2024 10:34

sweetsardineface · 01/11/2024 10:31

If Labour had put up income tax, the same people would be complaining. This country is in a huge mess and this government is at least being honest about the cost of rescuing public services from the absolute brink the Tories left them in. The longterm economic impact of poor health, schools, infrastructure and so on is devastating and we do have to think longterm, or future generations will be saddled with even more debt and inequality.

I do wish income tax on higher earners (including me) had been increased, but I expect that will come too.

It doesn't really matter about complaining or not, the rising cost of the debt is going to eat into taxpayer increases so we are paying more but for debt.

And you may well get your wish. more tax rises are likely.

TheTidyBear · 01/11/2024 10:33

AnonymousBleep · 01/11/2024 10:29

Yes, they'll have to absorb an increase in NI but that is business. You need to build in resilience, whatever type of business you are. Anything with tight margins is obviously going to find that much harder, and maybe the rules do need to be different for not-for-profits and charities, but that's what that lobbyists exist for. They won't be paying over £1000 extra in NI per employee as it's unlikely the majority of employees of a not-for-profit are on that kind of money to start off with.

Edited

I'm sure if they did an income tax raise across all salary bands you'd be the first to complain.

But when they do a blanket tax raise across all industries which impacts struggling sectors which don't make huge profits from automation, then it's apparently it's fair and just business.

Here's news for you, it's also 'just business', to make you redundant and reduce your salary. And that's what will be happening to a lot of people in these sectors, which won't result in any money being raised.

mrshoho · 01/11/2024 10:33

FlyMeToPluto · 01/11/2024 10:26

I went through the budget for our work for next year - we are having to cut 2 heads we were planning to hire in the UK because of the NI raise. I know a lot of businesses a similar size to us (medium size) will do the same. I suspect the medium term impact will be less companies hiring or fewer new jobs which will have an impact on the amount of people unemployed.

The ones that will really suffer though are hospitality - they employ a lot of people and don't make a huge amount of profit in the first place.

Were you not planning to increase salaries at all in your planning? It does seem that Employers will have room to reduce future salary increases if they are unable to cover the extra NI costs.

HotTopicsWithImogen · 01/11/2024 10:31

That's a shame.

Could you cut your own wage down, at all, to help fund this?

I'm sure you're aware that your own employees have been, collectively, cutting back for years.

sweetsardineface · 01/11/2024 10:31

If Labour had put up income tax, the same people would be complaining. This country is in a huge mess and this government is at least being honest about the cost of rescuing public services from the absolute brink the Tories left them in. The longterm economic impact of poor health, schools, infrastructure and so on is devastating and we do have to think longterm, or future generations will be saddled with even more debt and inequality.

I do wish income tax on higher earners (including me) had been increased, but I expect that will come too.