Employers advanced bonus payments to avoid April 2025 NIC Increase
By paying bonuses in March that would usually be paid in April or May 2025 employers have reduced the NIC receipts that the government will receive over the next 12 months – say Blick Rothenberg, the leading firm of accountants, tax and business advisors.
Robert Salter, a director with the firm said: “By paying bonuses in March, employers were able to ensure that these were only liable to employer’s NIC at a rate of 13.8%, rather than the 15% which is now due on those bonuses which are paid in the 2025/26 UK tax year – i.e. from 6th April 2025 onwards.
He added: “This represents an absolute saving for the employer but will have the impact of reducing the Government’s NIC receipts over the coming 12 months.”
Robert said: “Indeed, when one looks at the wider statistics published by the government this week including the numbers of people in employment as per the March PAYE returns, it is clear that the economy is presently in quite a poor position. The number of people in paid employment continues to fall – there was a 70,000 drop in employees between February and March 2025, with a particularly sharp drop in the numbers of employees in the hospitality sector.”
Robert said: “Economists and accountants said when Ms Reeves announced her increase in employer’s NIC in the Autumn budget it would reduce the wage rises which employees receive and would almost certainly increase unemployment – as employers try and manage their costs as much as possible – and quite probably reduce NIC receipts in the longer-term. Sadly, this prediction appears to be coming true. Hence without a significant change of direction, it is difficult to see how Ms Reeves’s desire to ‘kick start’ the British economy and get people off benefits and into employment can realistically be achieved over the coming months.”
Robert added: “The government’s draft tax receipts for March 2025 indicate that NIC receipts for March 2025 went up by 3.9% compared to March 2024, despite the employee NIC rate having fallen from 10% in March 2024 to 8% today. Whilst the extra NIC for March 2025 will be welcome by the chancellor of the exchequer, the reality is that there is strong evidence that this increase in NIC receipts is short-term, and it is quite probable that NIC receipts may fall over the coming months.”