Do employers want National Insurance contribution reform?

12 June 2018

Research from the Institute of Directors (IoD) found that 40% of employers support a reform that would scrap National Insurance contribution (NIC) exemptions in favour of a reduction in NIC costs.

The exemption currently means that those earning less than £162 per week are below the threshold for employers’ NICs, meaning employers effectively get a tax benefit from hiring part-time staff.

The research also found that 14% of the IoD’s members ‘strongly support’ and 26% ‘support’ abolishing the threshold and using fiscal saving to lower the cost of NICs from their current rate of 13.8%.

Stephen Herring, head of taxation at the IoD, said that the Chancellor needs to start thinking about reforming and simplifying the NICs system and could start by removing the exemption threshold for part-time work, which is clearly unpopular among company directors.

The research also found that 65% of respondents employed part-time staff, while 34% did not.

Read the full press release from the IoD.