In April 2025 National Insurance (NI) employer’s contribution will rise by 1.2%, and the threshold at which employers will have to contribute to NI will be reduced to all employees earning over £5000.
Principal Councils will be compensated for revenue lost due to the NI rises. But Town and Parish Councils will not receive any compensation from Government. This is estimated to cost Town and Parish Councils approximately £10 million extra each year.
Below is a template Council Motion for Town and Parish Councils that calls on the Government to change the criteria for compensating those affected by NI rise so that Town and Parish Councils are included.
A statement from NALC on the situation can be found here.
The template motion is below:
Council is deeply concerned that Town and Parish Councils will not be compensated for the changes in Employers National Insurance contributions, which will be introduced in April 2025.
From April next year employer’s National Insurance contributions will increase by 1.2% and the threshold at which employers must contribute to National Insurance will be reduced to all employees earning £5000 or more.
Principal Councils will be compensated for revenue lost due to the National Insurance rises. But Town and Parish Councils will not – as the criteria used to determine whether compensation can be received is whether the organisation receives direct funding from the Government.
The National Insurance increases are predicted to cost Town and Parish Councils an extra £10 million each year – roughly £615 extra for every employee earning over £9000.
Council welcomes pay increases and additional national insurance support for local government employees.
However by passing the bill on local Town and Parish Councils, the Government is forcing us to choose between possibly increasing Council Tax precepts or making staffing cuts.
Council resolves to write to the Minister for Housing, Communities and Local Government to demand that the compensation formula is changed so Town and Parish Councils receive the same compensation at principal councils for financial losses due to the forthcoming National Insurance changes.