National Insurance rises to fuel rise in pay-as-you-go employment, expert says

From April 6, companies will pay 15% rather than the existing 13.8%, with expectations that the spiraling cost of employment will force some firms to scale back.

But Kash Sangha, co-founder of digital marketing experts Creative Ideaz, belives it will create opportunities for other businesses who will embrace a more flexible model.

He said: “The rises in National Insurance Contributions will have a very real impact on British businesses and difficult decisions will need to be made to balance the books.

“Agility and creativity will be essential for companies who have to succeed against a backdrop of rising costs and greater uncertainty.

“As many firms put plans in place to move forward with a smaller permanent workforce, I have no doubts flexible working options will become more prevalent.

“Fractional employment, where freelancers or contractors provide specialised skills on an ad-hoc basis, continues to go from strength to strength and the rise in national insurance contributions will add even more fuel to the fire.”

Chancellor Rachel Reeves announced in the Autumn Budget 2024 that National Insurance Contributions would rise as she battled to plug a £10 billion gap in public finances.

The levy is one of a handful of costs employers are obliged to meet for their employees, along with pension contributions, holiday or sick leave pay and basic salaries.

And the spiralling costs make fractional employment a tempting solution to businesses who want to meet their goals without committing to permanent employees.

It’s one of the services offered by Birmingham-based Creative Ideaz, and Mr Sangha is convinced more and more leading firms will turn to such flexible staffing solutions.

He said: “With all the uncertainty we are seeing in the business world and global markets right now, it’s vital to make sure businesses get value for money when considering staffing options.

“At Creative Ideaz, pir fractional marketing model allows firms to access the high-level expertise they need in a flexible and cost-effective way.

“The model also allows businesses a range of other benefits including easy scaling up or down of projects and an outside perspective to maximise success.”