How can we prepare for April 2025 without losing control?
 
We suggest staying calm and calculating the impact of the announced Employer's NI increase to 15% and the reduced threshold from £ 9100 to £5000.
 

We have prepared our calculations based on New Rates to give you the hourly cost difference based on the hourly rate. The extra cost per labour hour differs between £0.42 - £ 0.68/per labour hour, and we are talking here about the hourly rate between £10 - £30/hour.
 

So, for example, if your labour hour cost increases by £0.50/ hour and you have ten employees working for you for 40 hours/week, the annual extra cost will be £ 1040 per person times 10 = £10 400. Considering the extra Annual Employment Allowance of £5500 (£5000 increasing to £10 500), your nett cost will be £ 4 900.
 

On the other hand, if you only employ four people, your extra employer's NI cost will be £ 5,200, so you will benefit from an extra £300.
 
If you break down your employees' costs, you will realise that the effect can be manageable. Otherwise, you will end up complaining, and your business will suffer. You can overcome those challenges only by facing the future and being proactive.
 
Things to consider today:
 
1. How to effectively manage labour time
2. Reducing overtime hours
3. Compare your labour cost to the subcontract cost value.
4. Review your profit margins
 

We at Prevail advise you to stay calm and continue to grow!
 
Contact us at office@prevailaccountancy.co.uk or call 01706 550825 if you would like us to send you our impact calculator and receive our complimentary autumn budget summary.