NALC is concerned about costs to parish and town councils from increased employer National Insurance 

We are deeply concerned that the government does not intend to compensate parish and town councils for the increase in the rate of employer National Insurance Contributions (NICs) from 13.8% to 15% from April 2025, announced in the Autumn Budget 2024. Our initial analysis shows this increase could cost the sector around £10 million a year.

The chancellor of the exchequer, Rachel Reeves MP, delivered her first Autumn Budget to parliament on 30 October 2024. The most significant announcement which will affect parish and town councils is that the government is increasing the rate of employer NICs from 13.8% to 15% and reducing the per-employee threshold at which employers become liable to pay National Insurance (the Secondary Threshold) from 6 April 2025 to £5,000.

Since the Budget, we have been pressing the Ministry for Housing, Communities and Local Government (MHCLG) to clarify whether our councils will be included in compensation to public sector employers for employer NICs bills. We are disappointed in the response we have now received from MHCLG officials that parish and town councils will not be compensated for this increase.

While we will be urging the government to rethink its position, in the meantime, we recommend that councils and county associations assess the financial implications for them in the current budget round for 2025/26. We are continuing to engage with MCHLG officials. We will provide a briefing shortly, including what further representations we will be making and how parish and town councils and county associations can help.