National insurance rise forces UK employers to shoulder £9bn tax burden

theguardian.com:

Britain’s employers are being forced to shoulder a £9bn tax rise after the government pushed ahead with raising national insurance on Wednesday despite stiff opposition.

Company bosses said the 1.25-percentage-point rise in national insurance contributions (NICs), which is paid by workers and their employers, would add to already severe pressure from runaway inflation and soaring business costs this year linked to Covid, Brexit and Russia’s war in Ukraine.

“[The] national insurance rise piles another cost pressure on top of firms at a time when they can ill afford to bear it,” said Shevaun Haviland, the director general of the British Chambers of Commerce.

“Members are telling us that energy bills are soaring while the price of raw materials are reaching levels many have never encountered before. This comes alongside vastly increased shipping costs and a squeezed labour market.”

According to Treasury figures released in response to a parliamentary question from Labour, the portion paid by employers is to raise £8.8bn for the exchequer in the current financial year.

The brunt of the rise will be borne by key sectors including manufacturing, which is facing extra taxes worth £900m. Employers in the health and social care sector will be taxed £1bn extra, while those in the wholesale and retail trade will face a similar increase and the construction industry will be landed with a bill worth £400m.

Jonathan Reynolds, the shadow business secretary, said the figures showed the government was not on the side of employers. “The Conservatives’ decision to hike taxes during a cost of living crisis will make things even harder for businesses and families,” he said.

Reynolds said Labour would instead have launched a one-off windfall tax on