The extent of the tax burden that has piled up on British businesses since the pandemic has been revealed by new HMRC data which shows that national insurance receipts have increased by almost 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 same period in 2019-2020. The increase amounts to an extra £55 billion a year coming into the Treasury’s coffers, most of which is taken from employer pay.
The trajectory has slowed significantly over the past twelve months. Receipts rose by 15 per cent in one year following changes introduced in April 2025, when the income limit for NICs was reduced to £5,000 and the employer’s rate increased to 15 per cent. Together, these measures, announced by Rachel Reeves in her first budget in October 2024, represent an annual tax increase of £25 billion aimed at employers.
Starting this month, businesses face more cost pressures. The national minimum wage rose 4.1 percent, including a 6.7 percent increase last year. Business prices also rose in clubs and restaurants, although pubs were partly protected from the rise by some of the several policy reversals made by Sir Keir Starmer’s government.
Robert Salter, a director at accountancy firm Blick Rothenberg, said the chancellor’s insistence that the employer’s NIC be increased does not mean that tax on working people is at odds with conventional economic thinking. He pointed out that higher social security costs tend to depress employment, a pattern he says is already evident in the rise in unemployment over the past year, while indirectly feeding into consumer inflation.
The broader financial picture offers little hope of relief. According to the Office for Budget Responsibility, the United Kingdom’s overall tax burden is set to reach a post-war peak of 38.5 percent of GDP by 2030-31. Income tax receipts have risen more than NICs, jumping by 69 per cent to £328 billion since the start of the pandemic.
The tax freeze, a tax deduction policy first introduced by Rishi Sunak in 2021 and since extended by Reeves through the end of the decade, has pulled millions of earners into higher tax brackets. Given its full duration, the freeze would rank among the biggest increases in effective tax on individuals in modern British history.
Meanwhile, conflict in the Middle East has sent oil and gas prices soaring, adding to input costs for producers. An industry survey published last week showed inflation in the manufacturing sector rising at the fastest pace since 1992.
For businesses already facing higher wages, rising NICs and higher energy costs, the growing burden raises serious questions about the government’s ability to stimulate the private sector growth it says is central to its economic strategy.
