New Tax Year, New Costs: What the End of the Financial Year Means for Property Professionals
New Tax Year, New Costs: What the End of the Financial Year Means for Property Professionals
Gregorian, Jewish, Chinese, Julian? There are far more calendars in existence than you probably realise but one is in the spotlight right now – the tax calendar. The new tax year starts on 6th April 2025 and it’s a line in the sand for businesses who file accounts.
This year it’s a case of ‘new tax year, new costs’ as there are sweeping reforms of the National Insurance Contributions (NICs) system. The overhaul was announced by the Chancellor in 2024’s Autumn Budget and the revised system starts on the first day of the new tax year.
Here’s an overview of what’s changing for employers from 6th April 2025:
- The rate of secondary Class 1 NICs paid by employers will rise 1.2% – up from 13.8% to 15%.
- The employer’s secondary Class 1 National Insurance threshold – the threshold at which employers start paying NICs – will decrease from £9,100 to £5,000.
- The maximum Employment Allowance claim amount per year will increase from £5,000 to £10,500.
- The £100,000 restriction, where employers with a NIC liability above this level in the previous tax year were unable to claim the Employment Allowance, is being removed.
The first two points are the most punitive for businesses that operate with employees. It’s hard to understand the impact on businesses using the above snapshot, so using a salary situation is a good way of calculating how businesses owners will have to adapt.
The true cost of increasing NICs
Let’s take a full-time employee earning £25,000. Before April 6th 2025, an employer would pay £2,194.68 in NIC annually at 13.8%. That contribution will rise to £3,000.48 annually at the new 15% rate. An annual increase in NICs of £805.80 may not sound a lot in isolation but multiply that by 5, 10 or however many people are employed, and the extra yearly costs soon mount.
Business owners have clearly been working out the sums in advance. A survey of more than 2,000 UK employers by the CIPD found confidence has already started to fall in the employment sector, with the organisation laying the blame squarely on the incoming NICs changes.
Some of the survey’s headline results include:
- Almost a third (32%) plan to reduce their headcount through redundancies or recruiting fewer workers.
- Two in five (42%) plan to raise prices in response to the increased employment costs.
- A quarter (24%) report they are cancelling or scaling down plans for investing in or expanding their business.
Many companies will find themselves at a crossroads as the new tax year starts. Rising costs will prompt a number of companies to shed staff, with the CIPD survey also highlighting how 16% of employers expected there to be a decrease in staff levels in the next three months. For comparison, in the previous quarter only 11% foresaw a drop in the number of people on the payroll.
Recruitment freezes are a real possibility
As well as letting staff go or pursuing ‘natural wastage’, there are indications that other workforce sizes will stagnate. In fact, HR Review reported that 1 in 5 UK HR leaders have already implemented hiring freezes, reflecting a cooling job market and rising employment costs. This is a detrimental step backwards for companies who have a desire or a pressing need to grow their teams, with higher costs stifling ambition.
Many of the strategy documents and advice-based articles aimed at those looking to mitigate rising NICs contain a recurring theme – outsourcing. Outsourcing is a great way to gain the skills and resources you need without hiring new staff.
Gain skills & services without the cost
Outsourcing works as you are buying a stand-alone service and not hiring a person. In many cases, delegation can negate the need to hire permanent staff who now attract higher NIC contributions. Outsource and you’ll:
- Comfortably overcome a recruitment free by bolstering your team as and when required
- Quell rising panic when people resign or retire by outsourcing their role
- Slash fixed overheads with a ‘pay only for what you need’ service
- Gain the ability to grown and scale back when it suits you
The property industry already relies on Viewber when it needs someone to visit a property on their behalf – maybe because they are flat-out busy, understaffed or closed due to a public holiday.
Now, Viewber is ready to step up and assist agents, property managers, auctioneers and social landlords when there’s a staffing squeeze where they work.
Partner with us and benefit from:
- A UK wide network of freelance property professions – no NICs to pay
- Low, fixed costs with no minimum order – pay our invoice, not a salary
- Order as frequently as you need – no wasted capacity
- 7 day a week availability, including evenings, weekends and Bank Holidays
Our Viewber network undertakes 1,000s of viewings, inspections, safety checks, open houses, key hand overs and ‘sit and wait’ assignments every year. You can also book a Viewber to take photos, videos and create 360-degree property tours while they are at a property.
If you discover the NICs changes are compromising the viability of your business, please contact us and discover the cost efficiencies we offer
