Nottingham & Sutton-in-Ashfield: 0115 940 2015 - Email enquiries@rumsby.com

Business groups warn over tax increases

Business groups have warned that the government's plan to raise national insurance contributions (NICs) and add a surcharge to dividend income will hamper the economic recovery.

08 Sep 2021

Business groups have warned that the government's plan to raise national insurance contributions (NICs) and add a surcharge to dividend income will hamper the economic recovery.

The government has announced a 1.25 percentage point increase in NICs to pay for increased spending on health and social care. It has also increased the scope of NICs to include retirees who continue to work, and there will be an additional 1.25% charged on dividend income.

Suren Thiru, Head of Economics at the British Chambers of Commerce (BCC), said: 'Businesses strongly oppose a rise in NICs as it will be a drag anchor on jobs growth at an absolutely crucial time. Firms have been hammered by 18 months of COVID-related restrictions and have built up huge debt burdens.

'This rise will impact the wider economic recovery by landing significant costs on firms when they are already facing a raft of new cost pressures and dampen the entrepreneurial spirit needed to drive the recovery.'

Lord Bilimoria, President of the Confederation of British Industry (CBI), said: 'The national insurance increase will directly hurt a business's ability to hire staff at a time when businesses have faced a torrid 18 months and are now fighting crippling labour shortages.

'Government must be wary of heaping further pressure on businesses who will be central to the recovery, particularly by making it more expensive to recruit.'

Andy Chamberlain, Director of Policy at the Association of Independent Professionals and the Self-Employed (IPSE), said: 'After the financial damage of the pandemic, exclusion from support and the changes to IR35 taxation, this new tax hike on dividends will make it almost impossible for freelancers to continue to work through a limited company. To limited company directors – from project managers to graphic designers – this is salt in a year of wounds.'

Testimonials

Services for business

Minimise your taxes and relieve you of the administrative burden

Here at DK Rumsby, we provide businesses of various sizes and types with unique, tailored accounting and taxation services.

Learn more

Services for individuals

We have a large core of personal tax clients

DK Rumsby provide individuals with comprehensive accounting and taxation services.

Learn more

Specialist Services

We offer specialist advisory and support services to many businesses

Our highly-qualified team cater for businesses in a variety of specialist sectors and divisions.

Learn more

Copyright

© 2025 DK Rumsby & Co Ltd. All rights reserved.

We use cookies on this website, you can find more information about cookies here.

Registered in England & Wales Company No. 3941558
Registered Address: Sutton-in-Ashfield
VAT Registration No. 118 7566 46

Contact Us

Please call:
Nottingham & Sutton-in-Ashfield - 0115 940 2015

Quick links

Home | Contact us | Site map | Accessibility | Disclaimer | Privacy | Help |

Nottingham Office
3 Colwick Quays Business Park, Colwick, Nottingham, Colwick, Nottingham NG4 2JY

Sutton-in-Ashfield Office
66 Outram Street, Sutton-in-Ashfield, Nottinghamshire NG17 4FS