Cliff Nicholls runs two trampoline parks and indoor play centres: one in Tamworth in the West Midlands, the other in Bolton, Greater Manchester. He’s already feeling the pressure from the government’s latest budget measures and has been forced to abandon further investment plans.
“The national minimum wage increases coming in April, combined with the reduced thresholds for national insurance and the increased rate of employers’ national insurance, will have a very significant impact,” Cliff said.
To cut costs, he’s already made drastic changes. “We’ve had to take some fairly radical decisions, reducing our opening hours, making a senior staff member redundant because of rising business costs, including business rates and national insurance,” he added.
While policies like the National Living Wage (NLW) increase are designed to support low-paid workers, other changes could offset these benefits.
One major shift is the reduction in the salary threshold at which businesses start paying employer’s national insurance contributions (NICs).
Currently, employers begin paying NICs when an employee earns more than £9,100 per year. From April 2025, this threshold will drop to £5,000. At the same time, the employer’s NI rate will rise from 13.8% to 15%.
Scroll through to see Cliff’s staffing finances
Under the new system, an employer will be paying nearly £800 more in NICs annually for an employee earning around £23,800 (based on a 37.5-hour week at the new NLW).
The rise in NICs will be proportionally higher for employers of lower-paid workers. For example, they will pay around 7% for someone earning £9,000 a year and 3% for an employee on the NLW. But for someone earning £75,000 a year, employers will pay 2% more.
Extended employment rights and business rates add pressure
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