NI increase goes ahead

The 1% increase to 13.8% in employers NI and to 12% in employees NI is set to go ahead in April 2011 despite the governments promise to abolish the rate rise for employers in the election campaign. The pain will be slightly mitigated by an increase of £21 above indexation in the threshold for employers before they have to start paying NIC on an employee.

‘Start up’ businesses will benefit from the exemption for employers from paying NI for the first 10 employees for 12 months. This exemption will be worth up to £500,000 for new businesses. This measure, designed to stimulate the private sector in regional areas, is only available to new businesses outside London and the South East, so unfortunately not a measure likely to benefit many of our clients.