This marks the highest quarterly employer NICs bill on record, following Rachel Reeves’ decision to raise the rate for employer NICs from 13.8% to 15%, effective from last April. The policy is expected to cost businesses £25bn a year.

UHY Hacker Young says the record tax burden on businesses is driving layoffs across the UK economy, with 55,000 jobs lost nationwide between April and May of this year.²

The unemployment rate now stands at 4.7%, the highest in four years. Sectors like retail and hospitality together account for 45% of all job losses since employer NICs rose in April 2025¹.

Comments from Phil Kinzett-Evans, Partner at UHY Hacker Young:

“A record National Insurance bill for businesses has added very sharply to the costs of large and small employers alike. It’s not surprising that in a zero-growth economy a jump in business tax taxes drives up layoffs across the whole economy.”

“Employers’ National Insurance is often referred to as a tax on employment. For many businesses the only way to manage this growing tax burden is to reduce their headcount.”

“Retail and hospitality have been especially hard hit, accounting for the lion’s share of job losses. Businesses in these sectors run on very fine margins and really struggle to absorb tax increases.”

“Small businesses are an integral part of UK plc. What hurts small businesses hurts employment and the wider economy.”

“The Government cannot tax its way into growth.”