SCC calls for halt to National Insurance contributions

13-02-2009

SCC calls for halt to National Insurance contributions
In a bid to fight rising unemployment levels, business leaders have called for a temporary halt for employers' National Insurance (NI) contributions.

According to the Daily Record, an employer's NI contribution is 12.8 per cent, meaning that for a worker earning £2,000 a month, the company would pay around £250.

The Social Chambers of Commerce (SCC) claims that the government needs to take action to reduce the costs of employment and work with firms to retain key workers.

Liz Smith, chief executive of the SCC, said: "With the UK Budget fast approaching, this would be an ideal opportunity for the chancellor to implement a holiday for employers' NI contributions, cutting the costs of employment at a crucial time for our economy."

A spokesperson for ClickAJob resists the move, expressing concern that employees will feel the effects in years to come.

"Keeping up full NI contributions is as much an overhead as employee salaries themselves," he points out.

"But as any employee over 60 who is suddenly out of work will tell you, they are a provision for all kinds of unforeseens and suspending them could cause hardship in the future."

"Long term, the value of money always seems to be less and less," he continues.

"So if cuts have to be made, it's better to face short term salary reductions than play around with provisions for difficulties later in life."

The Recruitment and Employment Confederation believes it is important for managers to keep their workers well informed about how a firm is going to survive the recession, Workplace Law Network reported.

Related categories: HR / Recruitment.


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