April 2025 NI Increase to 15% – How Outsourcing Non-Core Functions Can Save Money

From April 2025, employer National Insurance (NI) contributions will increase from 13.8% to 15%, and the NI threshold will drop from £9,100 to £5,000. This means higher employment costs, putting pressure on small businesses' cash flow and profitability.

While essential in-house roles will still incur these costs, outsourcing non-core functions can help businesses cut expenses and improve efficiency.

Defining core and non-core functions to outsource

What Functions Can Be Outsourced?

Outsourcing reduces payroll costs while ensuring operational efficiency. Businesses can outsource:

• Finance & Accounting – Payroll, bookkeeping, tax compliance, financial reporting.

• HR & Recruitment – Employee onboarding, benefits administration, compliance management.

• IT Support & Cybersecurity – Network security, data protection, software maintenance.

• Customer Service – Call center support, live chat, helpdesk services.

• Marketing & Content – Social media, SEO, paid ads, content writing.

  
  

This allows companies to maintain productivity without the financial strain of hiring full-time staff.

Advantages of Outsourcing

• Lower Payroll Costs – No NI, pensions, holiday pay, or sick leave.

• Access to Experts – Get specialist services without hiring full-time employees.

• Increased Efficiency – Free up time to focus on core business tasks.

• Reduced Overheads – Lower costs for office space, software, and infrastructure.

Challenges of Outsourcing

• Less Control – Direct oversight of tasks is reduced.

• Integration Issues – Requires coordination with in-house teams.

• Service Quality – Performance depends on the outsourcing provider.

• Long-Term Dependency – Relying on third parties can pose risks.

  
  

Choosing a reliable outsourcing partner helps mitigate these risks.

Conclusion

The April 2025 NI increase is unavoidable, but businesses can manage costs strategically. While essential roles will still incur NI expenses, outsourcing non-core functions can help reduce payroll burdens and increase efficiency.

A balanced approach—keeping core functions in-house while outsourcing tasks like finance, HR, IT, or marketing—can help businesses stay financially stable and competitive.