From April, employer NI contributions will rise from 13.8 per cent to 15 per cent, and the threshold at which contributions begin will fall from £9,100 to £5,000.
The Office for Budget Responsibility estimates this will increase payroll costs by around 2 per cent on average, adding pressure to firms already grappling with rising energy bills and inflation.
Salary sacrifice schemes will also see tighter tax-free allowances, cutting benefits for pensions and electric vehicle leases.
Employers face further cost rises as the National Living Wage climbs to £12.71 per hour for works aged 21 and over.
The rate for 18 to 20-year-olds and apprentices will earn £8 per hour.
The changes will significantly impact sectors such as hospitality, retail and care across the West Midlands.
Business rates reform will also reshape costs. Relief for retail, hospitality and leisure will fall from 75 per cent to 40 per cent in April, before a new “slice” system with permanent new multipliers for the sectors takes effect in 2026.
However the Budget delivered positive news for skills development.
The Government pledged £1.2bn annually to boost training and apprenticeships, alongside reforms to the apprenticeship levy.
The new Growth and Skills Levy will allow businesses greater flexibility to fund shorter, targeted training programmes, helping address critical skills gaps in digital, green technologies and technical roles.
Rob Colbourne OBE, CEO of independent training provider Performance Through People, said: “Employers want and need to invest in people but under the right conditions and with appropriate support to do so.
“Skills funding is welcome but cost pressures remain a serious concern.
“We have seen a huge drop off in employers recruiting staff or taking on apprentices since the previous Budget and unfortunately these extra burdens will not encourage employers to change their views regarding investment.”
