THE proposed employers’ National Insurance (NI) contribution increase of up to two per cent will impact Dorset workers, a tax expert has warned.

Nicola Campbell, a partner at Azets, an accountancy and advisory firm with offices in Poole and Blandford, believes the cost of the increase will inevitably influence business decisions.

She said: “For small businesses, the NI increase represents an additional cost burden at a time when many are already grappling with the effects of a 6 per cent rise in corporation tax just 18 months ago.

"The knock-on effects of this increase will surely be felt by workers, with businesses facing difficult decisions to offset rising employment costs.

"While the government maintains that the NI increase won’t directly impact employees, the reality is that these additional costs will inevitably influence business decisions – and these choices will likely trickle down to the workforce.”

Nicola expects that to mitigate the increased cost, many businesses will be forced to consider measures that could impact workers, including reduced hiring of new roles, recruitment freezes, paused or reduced benefits enhancements and restrained salary increases.

Although early estimates suggest the NI increase will cost businesses less than earlier rumoured changes to NI on pension contributions, Nicola Campbell stresses the importance of considering the broader impact.

She added: "Even seemingly indirect measures like this NI increase will have repercussions, influencing employment practices in ways that may ultimately impact employees across the UK.”