The scale of the tax burden heaped on British businesses since the pandemic has been laid bare by new HMRC data showing that national insurance receipts have surged nearly 40 per cent in just six years.
Figures from HM Revenue & Customs reveal that national insurance contributions reached £198 billion in the year to February 2026, a sharp rise from the £143 billion collected over the equivalent period in 2019-20. The increase amounts to an additional £55 billion a year flowing into Treasury coffers, much of it drawn directly from employer payrolls.
The trajectory has steepened markedly over the past twelve months. Receipts climbed 15 per cent in a single year following changes introduced in April 2025, when the earnings threshold at which NICs apply was cut to £5,000 and the main employer rate was raised to 15 per cent. Together, the measures, announced by Rachel Reeves in her first budget in October 2024, represented a £25 billion annual tax increase targeted squarely at employers.
From this month, businesses face further cost pressures. The national minimum wage has risen by 4.1 per cent, compounding a 6.7 per cent increase the previous year. Business rates have also gone up for clubs and restaurants, though pubs were partially shielded from the rise in one of several policy reversals by Sir Keir Starmer’s government.
Robert Salter, a director at accountancy firm Blick Rothenberg, said the chancellor’s insistence that employer NIC rises do not constitute a tax on working people is at odds with mainstream economic thinking. He argued that higher employer social security costs tend to suppress employment, a pattern he said is already visible in rising joblessness over the past year, while feeding through indirectly into higher inflation for consumers.
The broader fiscal picture offers little prospect of relief. According to the Office for Budget Responsibility, the United Kingdom’s overall tax burden is set to reach a postwar high of 38.5 per cent of GDP by 2030-31. Income tax receipts have risen even more steeply than NICs, jumping 69 per cent to £328 billion since the onset of the pandemic.
Frozen tax thresholds, a policy of fiscal drag first introduced by Rishi Sunak in 2021 and since extended by Reeves to the end of the decade, have drawn millions more earners into higher tax brackets. Taken over its full duration, the freeze is on course to rank among the largest effective tax increases on individuals in modern British history.
Meanwhile, the conflict in the Middle East has sent oil and gas prices climbing, adding to input costs for manufacturers. Industry surveys published last week showed cost inflation in the manufacturing sector accelerating at its fastest pace since 1992.
For businesses already contending with higher wages, steeper NICs and elevated energy costs, the cumulative burden raises serious questions about the government’s ability to stimulate the private-sector growth it says is central to its economic strategy.