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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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EasternStandard · 01/11/2024 08:56

Brananan · 01/11/2024 07:43

"The money has to come from somewhere"

I was hoping it would come from the very rich and the massive corporations, not our food security and small businesses.

That’s the pre GE spin for you, Labour had it pretty easy as many were happy to vote for them no matter what. Any question on where will the money come from was attacked, but that was madness. The scrutiny wasn’t there.

The manifesto also doesn’t reflect the budget with the huge tax hikes or the borrowing

We’re now paying more for that debt due to market reaction which will likely mean higher taxes again

TheNoonBell · 01/11/2024 08:55

It's pretty simple, the government is so bloated it is now consuming the productive economy and then borrowing more to cover the shortfall.

Govt revenue as percentage of GDP: 38%
Govt spending as a percentage of GDP: 45%

As they borrow more interest rates will increase and the cost to service the debt will consume ever more of the budget.

The debt and tax spiral is only going to get worse.

Diaryfear · 01/11/2024 08:55

It is going to cause some pain, I'm sure, but not to Local Authorities (as you OP states) or the NHS/schools, as public sector employers will get a rebate.

This impact is no doubt a problem, but in a budget where tough decisions had to be made, if this is the worst of it, it's a lot better than it could have been.

Plus why do people keeps saying it's against the manifesto. Can anyone tell me a single element of the burger which isn't in line with what they said they'd do?

Also, having worked for charities, I'd say they can look at their other expenses and waste, so I can't feel too sorry for them.

AquaPeer · 01/11/2024 08:53

Yes people being poor at the job and being made redundant rather than performance managed. endemic in many parts of the NFP sector

Seymour5 · 01/11/2024 08:50

PleaseSnow · 01/11/2024 07:42

Of course it's a tax on jobs. Where would you prefer to get tax from?

A couple of pence on income tax? Compared to what we paid years ago, 20p in the £ is low. I remember being on an ordinary wage and paying 35p, top rate was 83p! Those were reduced by the Thatcher government to 30p and 60p. Still well in excess of today’s rates. I’m no fiscal expert, but that would seem straightforward and relatively fair.

Cynic17 · 01/11/2024 08:48

Womblewife · 01/11/2024 07:42

The nhs will use the extra money in a stupid way and employ more managers - again. So
unless they have a clear guided plan for the spending - all the cash raised crippling businesses and preventing pay rises will be frivolously thrown down the drain on nonsense .

Absolutely this. Any extra money given to the NHS is just a complete waste - it's like setting fire to £10 notes.

WeWillGetThereInTheEnd · 01/11/2024 08:48

Your situation sounds unusual, in that you have fixed income and are not for profit. Is there anything you can do to raise money in a different way?

A care home? If so, I doubt fundraising will cut it. We read of a care home yesterday, run by a charity, whose costs have risen by £1 million pa, thanks to the budget increases in employers’ NI and the NMW. I doubt very much the Local Authorities and Integrated Care Boards will agree to increases in the fees, to cover these extra costs. (There’s no self funders, as the residents are working age adults with learning disabilities) The people who will suffer are the vulnerable residents, who already have practically nothing, as cuts will be made to the care and services they get. We know of another similar care home, which we believe will be forced to close, as their financial situation was worse to start with.

I am all in favour of increasing the NMW; but don’t believe that people who have even less, should be the ones to pay for it!

Cynic17 · 01/11/2024 08:46

You have my sympathy, OP. Those people saying "must tax the rich bosses" have absolutely no idea how business works. This vicious, nasty budget is going to affect small businesses, charities, arts organisations etc etc - and therefore all of us. It's unbelievably bad.

aCatCalledFawkes · 01/11/2024 08:45

AquaPeer · 01/11/2024 08:42

They often do it because they can’t do performance management. So they take the expensive way out.

Do you mean performance management as in disciplines? If so I don't think so. If anything you were expected to work harder for less money and yes people were disciplined that lead to being fired from there job.

PelicanPopcorn · 01/11/2024 08:45

Don't think there's any easy place for the money to come from. Working for a charity you will be seeing first hand the impacts of failing public services on the people you work with. These are catastrophic. NHS is at breaking point and it is our ultimate safety net. Totally think we need tax rises.

Would think the main concerns for the charity sector - when thinking about the impact on people rather than on organisations are:
-Somehow they are planning on cutting 4.3bn from the benefits bill - WTAF!
-Where was scrapping the two child benefit cap
-Hardly any money for social care.
-Hardly any money for tackling homelessness

Newterm · 01/11/2024 08:45

It’s horrendous for small businesses. Hairdressing salons, nurseries, care homes, businesses that barely balance the books at the moment. No more wage increases will be possible. Apprentices won’t be kept on after they qualify. I would imagine employers will be asking their staff to go self employed wherever possible. Interest rates won’t drop now.

AquaPeer · 01/11/2024 08:42

aCatCalledFawkes · 01/11/2024 08:39

I spent 17yrs working in the charity sector, restructuring and job losses just seemed to be ongoing for the whole time I was there due to things like less money incoming, new governments and new budgets (ie drop in humanitarian aid for the charity I was working for), the press and whatever else came our way. TBH I'm amazed that I survived 17yrs and would never go back due to the uncertainty. I'm now in the private sector, although we do have restructures staff are treated more fairly and its very different.

They often do it because they can’t do performance management. So they take the expensive way out.

aCatCalledFawkes · 01/11/2024 08:39

I spent 17yrs working in the charity sector, restructuring and job losses just seemed to be ongoing for the whole time I was there due to things like less money incoming, new governments and new budgets (ie drop in humanitarian aid for the charity I was working for), the press and whatever else came our way. TBH I'm amazed that I survived 17yrs and would never go back due to the uncertainty. I'm now in the private sector, although we do have restructures staff are treated more fairly and its very different.

flashbac · 01/11/2024 08:39

twinklystar23 · 01/11/2024 08:37

So if the rise is 1.8% £1k per employee is an average pay of £180k per employee? If were talking averages?

Did you not read the information about the reduced thresholds? It's not just a percentage increase. More is being paid due to threshold lowering.

OP posts:
twinklystar23 · 01/11/2024 08:37

So if the rise is 1.8% £1k per employee is an average pay of £180k per employee? If were talking averages?

ByQuaintAzureWasp · 01/11/2024 08:35

Hobbesmanc · 01/11/2024 06:51

The country needs money to invest in the services we demand. Personal tax increases weren't very palatable. Employers NI is a quick money grab that's sustainable whilst we have high employment and is a benefit for workers. I appreciate your position as a not for profit is different of course

We are all paying more tax as a % of income each year due to tax threshold freeze ... perhaps we won't now as employers will bless likely to give pay awards

HunsandRoses · 01/11/2024 08:35

This reply has been deleted

Message deleted by MNHQ. Here's a link to our Talk Guidelines.

I'm sure the food banks will run out of those pretty quickly with all the new unemployed people on their books.

It's self licking lolly pop. Make it harder to employ people, which increases the number of unemployed, which increases the benefits bill, which leads to more tax being imposed on employers to pay the benefits bill, and round and round we go.

flashbac · 01/11/2024 08:34

Brananan · 01/11/2024 08:18

According to dh you can still put new employees onto a 2 month temporary contract before deciding whether to employ them.

Nobody is going to apply for a 2 month contract unless very desperate or has limited skills or experience.

OP posts:
flashbac · 01/11/2024 08:32

Didimum · 01/11/2024 08:30

NHS and public sector (so councils, among others) are exempt from the NI rise.

I didn't know this so thanks. They need to extend this to charities and the third sector.

OP posts:
BadForBusiness · 01/11/2024 08:31

Rooftileswithmoss · 01/11/2024 08:20

Any of us who worked/work in the NHS know how unrealistic this is. They could put 5 more scanners in every hospital in England and Wales (if there was space, which there isn't), but then what? They'd need more radiographers, more radiologists, more oncologists etc ad infinitum.

The public are easily impressed by more scanners etc which is why politicians say it, but the reality is so much more complex. The funding needs to go first to training more staff. Even if they started today, they won't have more radiologists until the 2030s. Additional radiographers won't be ready until towards the end of this parliament.Having appropriately qualified staff is the most important thing of all, that's what I want them to be investing in.

Sunak's government did announce a major long term recruitment and training drive last year, which hasn't got much attention but sounds like a step in the right direction, including a much needed increase in medical school places. But the problem is in the words "long term".
https://amp.theguardian.com/society/2023/jun/30/what-is-the-nhs-workforce-plan-and-what-has-been-the-reaction

What is the NHS workforce plan and what has been the reaction? | NHS | The Guardian

Cautious welcome for long-awaited plans to plug staff shortages – but the ‘elephant in the room’ is pay

https://amp.theguardian.com/society/2023/jun/30/what-is-the-nhs-workforce-plan-and-what-has-been-the-reaction

Didimum · 01/11/2024 08:30

Fairyliz · 01/11/2024 06:55

I wondered about this. If the NHS employs 1.5 million won’t the extra money Labour put into it go on increased NI contributions?

NHS and public sector (so councils, among others) are exempt from the NI rise.

Chersfrozenface · 01/11/2024 08:29

ByQuaintAzureWasp · 01/11/2024 08:17

Will the extra billions given to the NHS cover their increased NI liabilities? I doubt it will.

It depends what you mean by "the NHS".

Those parts of the NHS that are in the public sector, the majority, will be exempt.

Private sector bodies which provide NHS services won't be.

See this article
https://www.google.com/amp/s/www.bbc.com/news/articles/cgl409gww1go.amp

AquaPeer · 01/11/2024 08:28

Killingoffmyflowersonebyone · 01/11/2024 08:25

TBH OP I don’t know what you want out of your post - everyone who has posted facing similar issues (whether it not it’s a non-profit) has basically been told ‘tough shit’ and when we’ve said we’ll have to fire people to afford the increases we’ve been told our businesses must be crap. But you also need to consider that business rate tax is effectively going up - so that’s more money you’ll need to find (sorry)…

Edited

As per your other thread - in your case you need to raise your prices, you didn’t mention your businesses insanely low prices you didn’t in your posts until very late in just one of your posts about this.

highly likely OPs NFP is also carrying some dysfunction that could be addressed to compensate for the additional £1k per employees

BadForBusiness · 01/11/2024 08:27

Fair enough, I didn't know they'd said that.

Genevieva · 01/11/2024 08:25

The increase in NI will cost my employer over £1,000 just for me. I hate to think what the total will be.