To support small businesses with these changes, the government is increasing the employment allowance from £5,000 to £10,500 and removing the £100,000 threshold, expanding this to all eligible employers.

From April 2025, the removal of the employment allowance cap means employers with ER NIC liabilities over £100,000 in the previous tax year (but which are otherwise eligible) will be able to claim the full £10,500 amount, the Treasury policy costings confirmed.

The increase in the allowance means that 865,000 employers will pay no NICs at all next year.