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The business impact of the NICs increase

We analyse business responses collected from our regular surveys about the impact of the hikes in National Insurance Contributions.

19 Sep 2025, 7 min read

The Autumn Budget in October 2024 increased the cost burden of businesses through the hikes in National Insurance Contributions (NICs), lowering the secondary employer NICs threshold, and a significant increase in the National Living Wage (NLW). These measures compounded firms' cost pressures at a time when many firms had been facing sustained squeezes in profit margins.

One of the key questions following the announcement of these measures was how businesses would respond to higher labour costs when they c

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