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UK: The Labour Market Overview, published today by the Office for National Statistics, estimates the number of UK payrolled employees in May 2025 decreased by 109,000 following the hike to employer NICs in April.
The loss of jobs exceeds predictions from both the Office for Budget Responsibility (OBR) and a major bank.
The OBR originally predicted that changes to employer NICs would cost 50,000 jobs, before revising its prediction to say the impact would be higher. Deutsche Bank predicted it would cost 100,000 jobs.
Kate Nicholls, chair of UKHospitality, said: “Losing more than 100,000 jobs across the economy in a month goes far beyond the worst-case scenario predicted by the government’s own fiscal watchdog, major banks, and countless business groups.
“At a time when we are all striving to grow the economy and help people back into work, the changes to NICs are acting as an anchor to the government’s ambitions. Sectors like hospitality are the very sectors you need to create jobs in every part of the UK and for people of all ages, education and background, but hospitality and those working part-time are among the hardest hit by these tax increases.
“These shocking figures should make it abundantly clear to the government that the changes to employer NICs are inflicting more harm than good, and they should be reviewed and reversed urgently,” she added.
In October 2024, UK Chancellor Rachel Reeves MP announced that employer’s NICs would increase by 1.2 per cent to 15 per cent from April 2025, and that the threshold at which companies will have to start making contributions will drop from £9,100 to £5,000.
Earlier this week, UKHospitality restructured its leadership team with Nicholls promoted to chair and Allen Simpson assuming the role of CEO.
Highlights:
• The UK lost 109,000 payrolled jobs in May 2025, far exceeding government and banking forecasts.
• The Office for Budget Responsibility and Deutsche Bank underestimated impact, with actual job loss exceeding both.
• UKHospitality has urged the British government to reverse NIC changes, warning of serious long-term economic consequences.
