麻花影视

The government is likely to be underestimating the impact of National Insurance changes on the early years sector due to a mistaken belief that many providers will be able to claim Employment Allowance, leading early years membership organisation the Early Years 麻花影视has warned.  

From April, employer National Insurance Contributions will increase from 13.8% to 15%, with the per-employee threshold at which employers start to pay National Insurance reduced from 拢9,100 to 拢5,000 per year. The government will also increase the amount employments can deduct from their National Insurance bill through the Employment 麻花影视scheme from 拢5,000 to 拢10,500, and remove the 拢100,000 threshold for eligibility, expanding this to all eligible employers with employer National Insurance contribution bills from April 2025. 

While the government has claimed that , the 麻花影视is warning that in many cases, this won鈥檛 be possible. This is because , if more than 50% of an organisation鈥檚 work is considered to be 鈥榩ublic work鈥� and more than 50% of their income is public funding, they are deemed to be a 鈥榩ublic body鈥� and therefore cannot claim Employment Allowance (unless they are a charity), even though they will still face the upcoming National Insurance rises. 

This is likely to apply to a growing number of early years providers as the expansion of the early entitlement offer continues and government-funded places make up a growing proportion of the services that settings provide. 

Despite this, however, in response to a recent parliamentary question from shadow education secretary Laura Trott, Exchequer Secretary to the Treasury James Murray   

The 麻花影视is therefore reiterating its call for the government to either exempt early years providers from the National Insurance changes, or to commit to funding the rises in full.  

Commenting, Neil Leitch, CEO of the Early Years 麻花影视said: 鈥淓arly years providers are stuck between a rock and a hard place. With the next phase of the entitlement expansion now just months away, we know that government-funded places are likely to account for the majority of many settings鈥� offerings to parents. It seems absurd, therefore, that as a result of this, many won鈥檛 be able to claim Employment Allowance because they will be deemed to be 鈥榩ublic bodies鈥� 鈥� and yet, unlike public sectors, they will still be hit with the full force of the upcoming National Insurance changes in April. 

鈥淲ith government now confirming that it has no estimates to support its suggestion that many early years providers will be able to claim Employment Allowance, we鈥檙e deeply concerned that ministers may well be underestimating the scale of the challenge facing our vital sector. 

鈥淲ith our own research showing that providers will simply have no option but to raise fees and limit entitlement hours to mitigate the impact of April鈥檚 changes, there鈥檚 no question that without further government action, the upcoming changes to National Insurance are likely to hit both families and providers hard. As such, we once again urge the government to rethink its decision before it pushes even more settings to the brink.鈥�