Soaring costs | How the National Insurance hike will affect your business

The much-heralded increase in National Insurance comes into play today. Employees, businesses and the self-employed will pay an extra 1.25p in the pound as the base rate for National Insurance rises from 12% to 13.25%.

In real terms, this will mean an employee earning, for example. £27,000 a year example, will see their annual National Insurance contributions rise from £2,053 to £2,268.40.

Businesses paying Class 1, Class 1A or Class 1B National Insurance contributions will also need to start paying the extra 1.25% on contributions from today. Smallbusiness.co.uk estimates that the hike will see the NIC bill of the average employer increase by roughly 10% as a result of the changes.

'Health and Social Care Levy'