Category: Employment Law, Taxation and Legislation for Contractors

The partial reversal of the planned rise in national insurance contributions has been described as a "welcome relief".

Labour had suggested a one per cent increase in employer contributions, a move which was likely to hit umbrella contractor companies and many other UK businesses.

However, the Conservative-Liberal Democrat coalition government announced in last week's Queen's Speech that the increase would be at least partially reversed.

This was welcomed by Paul Venables, group finance director at Hays.

"As we said in our Manifesto for Employment, an increase in national insurance contributions on employers is in effect a tax on jobs and with the economic recovery as fragile as it is, the last thing we need for business is any further financial burden related to the costs of employment which might deter employers from taking on new staff," he told Recruiter.

The government also revealed plans to bring forward the increase of the state pension age and increase personal allowances for income tax.

Posted by John Crawley