How Outsourcing Can Help UK Firms Manage the National Insurance Rise

Since April 2025, UK businesses have been paying more for their staff. As per HMRC, Employer National Insurance contributions increased to 15%, and the earnings threshold was reduced from £9,100 to £5,000. For a company with 50 employees, this adds roughly £45,000 a year to employment-related cost.
The effect is already visible. As per ONS data, the number of pay rolled employees fell by 149,000 between October 2024 and October 2025, while vacancies declined to 729,000. 
In this environment, outsourcing is increasingly being used to manage work without adding further fixed cost.

•    First, the increase in Employer National Insurance has added a fixed cost at the employment level. The overall cost to company for each hire has gone up, which directly affects margins, especially for firms operating on stable or capped fee arrangements.

•    Second, with higher fixed employment cost in place, firms now need to manage their resources far more carefully. They have to assess how much work is being delivered by the existing team and whether the output justifies the fixed employment spend.

•    Third, most accounting firms cannot increase client fees simply because their internal cost has risen. Pricing is often constrained by market conditions and existing client agreements. In this situation, outsourcing allows firms to manage cost without increasing what clients are charged, while still meeting delivery requirements.

Outbooks has been supporting similar UK firms for over 15 years. Based in London, with a team of more than 500 professionals, we work with over 200 practices and more than 30,000 end clients globally. For many, outsourcing has become a way to maintain service levels while protecting margins as employment cost continues to rise.

For more information, please email info@tagcommunity.co.uk