Employer National Insurance increase in Autumn Budget

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 National Insurance contributions (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 parish and town councils will be included in compensation to public sector employers for employer NICs bills.

NALC are bitterly disappointed in the response they have now received from MHCLG officials that parish and town councils will not be compensated for this increase. This is highly concerning as we have estimated it may cost the sector around £10 million per year. We will be pressing the government to rethink its position. Still, in the meantime, we recommend that parish and town councils and county associations assess the financial implications for them in the current budget setting. We are meeting MCHLG officials this week and will provide a briefing shortly, including what further representations we will be making and how councils and county associations can help.