01 August 2025
EDIT: The Department for Business and Trade (DBT) has confirmed the wording in the executive summary refers to the increase in Employment Allowance (in effect raising the point at which small businesses pay National Insurance, although not technically raising the limit), not an indication that government plans to introduce a differing secondary threshold for smaller businesses.
The government has released a policy paper titled ‘Backing your business: our plan for small and medium sized businesses’ laying out the long term plan for supporting small businesses in the UK.
The executive summary holds some items that could be key for payroll professionals and payroll software developers to be aware of, however, the full plan contains no further details on these updates:
- raising the limit at which small businesses start paying employer national insurance from £5,000 to £10,500
- reforming the previous Apprenticeship Levy as a new Growth and Skills Levy.
The first could see different thresholds dependent on the size of your business and the second could mean changes to the way apprenticeship levy is taken and administered.
While the CIPP needs further information to understand how these plans would implemented, it is clear that multiple National Insurance thresholds would be a tricky policy to implement cleanly and would take some planning and legislative change. We will continue to monitor this and feedback to government when appropriate.
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