The chancellor Rishi Sunak is being urged to reconsider the increase to National Insurance contributions from 1 April if small businesses, including many estate agents, are to survive.

David Hough, a partner at Blick Rothenberg, a tax and advisory firm, argues that small businesses, such as estate agents, face significant pressure on basic salaries to keep up with inflation and tax rises, and the economy needs time to rebound or small businesses will fail.

He said: “The chancellor must now urgently reconsider the increase to national insurance contributions which come into effect in April.”

“Entrepreneurs with small businesses are having to make difficult decisions on pay as we approach April. Inflation is running at 5.4%, according to the latest figures published by the Office for National Statistics (ONS) with a tax increase of 2.5% effective at the same time due to the 1.25% increases to employee and employer national insurance contributions on the same date.

“A business owner with a total employee cost of £1m per year who aims to keep net pay for their employees the same in real terms, faces salary and social security increases of over £82,000 per annum [8.2%] by the time that inflation, national insurance increases, and the impact on pension auto enrolment payments are factored in.”

Hough added: “These increases would only keep the employee at the same level in real terms at a time when the cost of living is increasing dramatically. This puts small business owners under significant pressure to maintain levels of pay or risk the loss of key employees.

“Government coffers will be swelled by tax receipts on higher wages, and the freeze to personal tax bands until 2026 should enable the Chancellor to step back from increasing National Insurance payments.”