Employers’ National Insurance hike huge blow for umbrella company contractors

The announcement of a rise in employers’ National Insurance during Wednesday’s Budget has been criticised for not only having a negative impact on employers, but the umbrella sector too.

The Labour Party’s pledge to ‘not increase taxes for working people’ is not entirely being met considering this will be at a cost for umbrella company contractors.

The IPSE describes this as a ‘hammer blow’ to the sector.

Andy Chamberlain, Director of Policy at IPSE, said, “The Chancellor’s changes to employers’ national insurance will leave a huge dent in the finances of more than 700,000 umbrella company workers, who cover the cost of employers’ national insurance through their rate of pay.

“Not only will they be covering a higher headline rate of employers’ NI from next April, but they’ll be paying it on an extra £4,100 of their earnings. For many umbrella workers, this will cost them in excess of a thousand pounds per year.

“This is a hammer blow for umbrella company workers – many of whom have been forced into these companies due to IR35 tax rules – and is a clear breach of government’s pledge not to raise taxes on working people.”

To find out more about contracting please contact Sophie on 01206 591 000 or email sophie.lewis@contractoumbrella.com.