The impact of the increase in employers’ National Insurance contributions is already being felt by small businesses in North Yorkshire, an MP has warned.
Sir Alec Shelbrooke, MP for Wetherby and Easingwold, has been raising the concerns of local businesses in his constituency in Parliament.
From April, the rate of employer NI contributions will rise from 13.8 per cent to 15 per cent and the employee salary threshold at which firms start paying the tax will drop from £9,100 to £5,000 a year.
Public sector organisations, such as councils, are receiving grants to cover the costs of the rise but businesses will bear the full brunt of the change.
In an update for councillors on North Yorkshire Council’s Thirsk and Malton area committee, the Conservative MP said: “I’ve been raising the concern of local businesses in Easingwold and surrounding villages regarding the impact the increase in employers’ National Insurance contributions (NICs) will have from April.
“In most cases, the impact is already live as small businesses have taken difficult decisions in advance of April to make redundancies or freeze recruitment.
“For larger firms, predominantly those located in York, Harrogate and Leeds but whose employees live in our area, companies are reporting the freezing of pay for senior roles in order to meet the extra cost of hiring staff on the National Living Wage.”
The MP said people should prepare for the impact of the increase on employment statistics.
“We’re already seeing a rise in unemployment, rising inflation and business confidence below the historic average,” he added.
Sir Alec said he had also heard from local farmers concerned about the impact of the removal of Agricultural Property Relief from inheritance tax.
The MP said multi-generation farming families were now reconsidering the viability of their farming businesses.
“A point I’ve made repeatedly in debates in the House is the impact this decision will have on the entire ecosystem of our rural economy; farmers’ markets, butchers, greengrocers, etc all relying on produce from our local farms,” he added.
The update will be presented to councillors at the area committee on Friday.