As one year ends and another begins, there is a habit to look back on what has just passed and try to make sense of it.
Whether that is by ranking the top films of the year or sharing a Spotify Wrapped playlist, we can think about the future by looking at the recent past.
HMRC have been looking back on the tax year so far and has published the current rates of collected tax.
Unsurprisingly, employer National Insurance Contributions (NICs) have hit record highs while other taxes are down.
NICs are unlikely to fall soon, so how can businesses prepare for the future?
The data released by HMRC captures how difficult the tax year has been so far for employers.
Having increased by almost a quarter, the revenue collected from employer NICs has risen from £75.9 billion in the previous year to a staggering £93.7 billion in the period between April and November.
The impact of the 2024 Autumn Budget is being felt in this 23 per cent increase that is the result of changing rates and increasing wages.
The rate of employer NICs rose from 13.8 per cent to 15 per cent from April 2025 and allowances for lower-paid workers were halved.
When this current tax year draws to a close, it is believed that the £116 billion collected in the 2024-25 tax year will be eclipsed by a new record amount.
There were no specific changes to NIC rates in the 2025 Autumn Budget, but this does not mean that relief will be coming soon.
The increasing National Minimum Wage and National Living Wage will likely see wages driven up across the board and this will mean employers face steeper NICs.
There is a concern that if these changes are not managed effectively, employers may have to reduce team sizes and this could worsen the job market and rising unemployment.
Salary sacrifice has been a historically effective way of keeping NICs down, but this is now only a short-term solution.
From April 2027, a £2,000 threshold will be placed on salary sacrifice, with any amount over that becoming subject to tax and NICs.
The once-strong solution to NICs will now be limited, meaning employers should brace for steeper NICs in 2027 and beyond.
Our expert team are on hand to help you manage your growing employee expenses so that your team can continue to operate effectively.
We can help you plan for the 2026 tax year now so that you are not caught out by upcoming changes.
Speak to our team today to build your financial resilience ahead of the next tax year.
