NIC increase is unfair on umbrella company contractors, says FCSA

With NICs set to rise next month, the Freelancer and Contractor Services Association (FCSA) say that these changes are particularly unfair on the umbrella sector.

Set to take effect from the 6^th April 2022, the ‘Health and Social Care Levy’ will see a 1.25% increase in order to help the NHS recover from the impact of the pandemic.

However, umbrella company contractors will be hit more than once by the NICs due to the additional charges that will come from their umbrella company’s overheads – the FCSA say that workers could end up losing almost 2.5% of their take home pay.

The FCSA say: ‘This is clearly unfair, and we are asking FCSA members to work with their supply chain, the employment agencies and end-users, to ensure that the end-users increase assignment rates to account for this rise so that the extra burden caused by the NICs increase does not fall on the worker.

‘FCSA are also urging the Chancellor to cancel these increases in NICs altogether or, failing that, to introduce an amendment requiring the end-users to increase the assignment rates paid to their freelancers to account for the rise in employer NICs.’

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