• Swindon & Wiltshire Economy
• Wednesday June 18 2025

South West business owners plan further staff cuts following National Insurance hike

Almost four in ten business owners based in the South West are planning to make further cuts to staff numbers in response to increased employer National Insurance Contributions, according to new research for professional services group S&W.

The research, which polled UK business owners with turnovers of £5 million upwards, was published as part of S&W’s Business Owners Sentiment Survey (BOSS) report.

It also found that 24 per cent of South West business owners surveyed had already reduced their staff headcount as a direct result of NIC changes announced in the October 2024 Budget.

This means that 63 per cent business owners in the South West have or are planning to reduce staff numbers in response to the NIC changes announced by the Chancellor – significantly higher than the national average of 53 per cent, with one in five business owners UK-wide surveyed saying they have cut staff and a third planning to.

From April 2025, employers faced the rise in employers’ NIC from 13.8 per cent to 15 per cent, while the earnings lower threshold above which employers must pay NIC was reduced from £9,100 to £5,000.

Aside from NIC changes, S&W’s research found significant numbers of owners in the South West saying their businesses had been impacted by a range of other external events in the last six months.

Rising costs were among the most likely to have hit businesses, whether increased energy and fuel prices (29 per cent) or increases in raw materials and goods prices (31 per cent).

Almost as many surveyed in the South West said they had been impacted by global political uncertainty (27 per cent). Around one in three of those surveyed in the region, meanwhile, said that their business had been affected by reduced customer demand (31 per cent), labour shortages (29 per cent), and cyber attacks or data breaches (29 per cent).

Businesses in the South West see an equally wide array of potential challenges ahead.

Similar concerns were raised by owners when asked what three factors had the potential to most negatively impact their business.

Top of the list for those surveyed was labour shortages / skills gaps (35 per cent), followed by potential changes to workers’ rights being implemented by the Employment Rights’ Bill (33 per cent).

Helen Bassett, regional managing partner at S&W’s Bristol office, commented: “While we see many businesses in the South West continuing to flourish, we know that others are having a difficult time.

“The increased NI costs have hit labour-intensive sectors like hospitality and retail particularly hard. Our research shows the huge array of challenges that businesses in the region are currently facing.

“Given the challenging economic backdrop, businesses need to urgently take stock of the risks that could affect their operations and plan accordingly. Those that take a realistic look at the pressures facing their businesses and focus on building cash reserves will maximise their chances of survival and saving jobs.”