In this week’s Enews, we look at warnings from businesses over the impact of April’s employers’ National Insurance contributions (NICs) increase. There is also news on HMRC’s tax guidance for employers and the latest advisory fuel rates to update you on.

• Businesses warn of National Insurance ‘powder keg’
• Latest guidance for employers
• Advisory fuel rates for company cars

The overwhelming majority of businesses say the rise in employers’ NICs will force them to change their plans, according to research by the British Chambers of Commerce (BCC).

With under six weeks until the NICs rise comes in, 82% of firms say the tax hike will cause them to rethink. In addition, 58% of surveyed businesses say it will impact recruitment plans, and 54% that it will affect their prices.

Meanwhile, more than a third of firms suggest investment and day-to-day operations will be impacted.

Alex Veitch, Director of Policy at the British Chambers of Commerce said:

‘The clock is ticking down to the NICs rise, and firms are already telling us they are sitting on a powder keg of costs.

‘The government has pledged to retain the NICs tax position through the life of this parliament, but our new evidence should give pause for thought. We need the government to publish a wider tax roadmap for business, setting out the direction of travel for costs like NICs and business rates.

‘Business rate reform must be an urgent priority, creating a system that incentives investment. Getting on with planning and skills reforms will also remove blockers to growth.’

Internet link: BCC website

HMRC has published the latest issue of the Employer Bulletin. The February issue has information on various topics, including:

• end of year reporting
• payrolling employees’ benefits and expenses
• get ready for changes to National Insurance
• new online iForm for PAYE employment expenses
• expanding the cash basis
• relevant motoring expenditure - National Insurance contributions.

Please contact us for help with tax matters.

Internet link: Employer Bulletin

New company car advisory fuel rates have been published and took effect from 1 March 2025.

The guidance states: ‘you can use the previous rates for up to one month from the date the new rates apply’. The rates only apply to employees using a company car.

The advisory fuel rates for journeys undertaken on or after 1 March 2025 are:

Engine size	Petrol
1400cc or less	12p
1401cc - 2000cc	15p
Over 2000cc	23p

Engine size	Diesel
1600cc or less	12p
1601cc - 2000cc	13p
Over 2000cc	17p

Engine size	LPG
1400cc or less	11p
1401cc - 2000cc	13p
Over 2000cc	21p

HMRC guidance states that the rates only apply when you either:

• reimburse employees for business travel in their company cars
• require employees to repay the cost of fuel used for private travel.

You must not use these rates in any other circumstances.

The Advisory Electricity Rate for fully electric cars is 7p per mile.

If you would like to discuss your company car policy, please contact us.

Internet link: GOV.UK AFR