Nation insuarance employer contribution fair?

iinvestor

At the moment any Company employing staff has to pay employers national insurance contribution of around 12 to 13% on the employers salary after the tax free allowance of around £5500. This is in addition to the NIC paid by the employee.

With the credit crunch going on at the moment, firms thinking of recruiting could be discouraged because of this tax. Which is effectively a tax on creating jobs. Surely the government should be providing incentives for creating jobs, and not discouraging companies by increasing their tax liability when they create jobs. By not having employers NIC firms would be more likely to recruit, as it would be less costly and the government would be able to make up the difference by earning more income tax, employees national insurance, additional VAT and less tax credits and job seekers allowance.

trevormax

I agree that reducing employers NI contributions would help employers in the current crisis. However, so would reducing the amount of tax the employee has to pay. This would help more in my opinion as people would have more money to spend and businesses would have more business from these people. The increase in business would allow them to hire more staff who would in turn spend money also.