Why Employers’ NIC Rises and Global Instability Make Labour Supply Chain Assurance Critical in 2025
By Chris Dunn, Managing Director, OPRaaS.co.uk
April 2025 has brought with it a sharp rise in operational pressures for UK businesses. With changes to Employers’ National Insurance Contributions (NICs) coming into effect on 6 April — including a rise from 13.8% to 15% and a significant lowering of the threshold to just £5,000 — companies are facing mounting workforce costs at the exact moment global markets are becoming less predictable. According to the UK government, these increases are “necessary to fund public services” and expected to raise £25 billion annually for the Exchequer (GOV.UK).
But the real challenge for business leaders isn’t just the rise in NICs itself — it’s how these increases intersect with growing insecurity in global trade, regulatory scrutiny, and compliance risk embedded in the labour supply chain.
Rising Costs and Receding Margins
The increase in employer NICs isn’t happening in isolation. Just two days ago, U.S. President Donald Trump announced sweeping new import tariffs, including a baseline 10% duty on all foreign goods, with steeper rates for countries such as China (34%) and the EU (20%). While the long-term impact remains to be seen, the announcement sent the Dow Jones tumbling 1,600 points and revived fears of a global trade war (Time, Reuters).
In such volatile conditions, every part of a business comes under stress. Finance departments face growing uncertainty in forecasting. HR and payroll teams must justify rising costs per head. Procurement leaders feel pressure to contain supply chain budgets. And recruitment agencies and umbrella companies are again being asked to “do more with less” — a familiar and dangerous phrase in compliance circles.
The Perfect Storm for Labour Supply Chain Risk
As we’ve seen in every past downturn — from the 2008 financial crisis to the COVID era — economic strain doesn’t eliminate risk. It masks it.
Non-compliant umbrella providers reappear with false promises and opaque deductions. Mini Umbrella Company (MUC) fraud resurfaces as entities attempt to exploit tax thresholds. Disguised remuneration models quietly re-emerge. And temporary workers, facing their own financial pressures, are more likely to accept confusing deductions or sign contracts without fully understanding them — exposing the entire chain, right up to the end-hirer.
And let’s not forget: the Criminal Finances Act 2017 remains fully active. There are no allowances for “tough economic times”. If HMRC believes your business failed to take reasonable steps to prevent tax evasion in your supply chain, you may find yourself liable — legally and financially.
Why LSCA Is Built for This Moment
At OPRaaS, we created the Labour Supply Chain Assurance (LSCA) Self-Certification Audit for precisely this sort of moment: when clarity, structure, and forward planning are essential.
LSCA is not just a tick-box compliance tool. Nor is it a passive training course that gathers dust after completion. It is an independent, audit-ready assurance tool that future-proofs your workforce compliance, built to align with HMRC guidance, IR35 considerations, VAT fraud risk, and the CFA 2017.
It provides each participating party — end-hirer, agency, or umbrella company — with a clear compliance report, a tangible risk score, and practical, actionable next steps for remediation where required. Most importantly, it gives your leadership team the proof you need when challenged by regulators, boards, or clients.
Who Should Be Paying Attention?
If you’re an end-hirer, you face real exposure to downstream tax debt, ESG failures, and reputational harm. Having LSCA in place helps you build an auditable layer of assurance across your agency and umbrella supply chain — and signals to your board that you’re not asleep at the wheel.
If you’re a recruitment agency, LSCA positions you ahead of your competitors. Clients are increasingly requiring proactive compliance assurances. LSCA gives you a clear, evidence-led way to show alignment with regulation and client ethics, while strengthening your place on PSLs.
And if you’re an umbrella company, LSCA offers a practical answer to the rising threat of blanket bans. Instead of being tarred by the same brush as non-compliant operators, you can stand apart — and help your partners do the same.
A Word of Advice from the Front Lines
I’ve worked in workforce compliance long enough to know that when costs rise, corner-cutting begins. And in the labour supply chain, that is where businesses most often get caught out.
LSCA isn’t about red tape — it’s about resilience. It’s a shield, not a spreadsheet. A system that allows you to look beyond the invoice and understand the integrity of your workforce arrangements. And in today’s economic storm — from NIC rises to tariff tremors — that assurance is not just welcome. It’s essential.
Ready to Certify Your Labour Supply Chain?
If your team is grappling with:
• Rising Employers’ NIC costs
• Increased audit exposure
• Concerns about worker exploitation or disguised remuneration
• ESG and reputational scrutiny
• Or simply the sense that compliance is harder to see, but no less dangerous
Then don’t hesitate to contact me.
Contact OPRaaS:
Start the OPRaaS Self-Certification in Labour Supply Chain Assurance Course FREE today
Chris Dunn is Managing Director of OPRaaS.co.uk, specialist in labour supply chain compliance and risk assurance. He works with end-hirers, agencies, and umbrella companies
