91Èȱ¬

The chief executive of NI's biggest IT firm says a tax increase in the Westminster Budget will add about £2.5m to the company's employment costs.

Russell Sloan was speaking as Kainos reported half year profits of just over £38m.

The Budget saw a hike in the amount employers pay in National Insurance contributions, a tax paid on each employee's salary.

From April, the rate will rise from 13.8% to 15%, and the salary threshold at which it is paid will fall from £9,100 a year to £5,000.

Chancellor Rachel Reeves has said her National Insurance changes for businesses will generate £25bn, which will aid funding of public services such as the NHS.

Kainos, which is based in Belfast, employs around 2,500 people across the UK.

It specialises in helping organisations digitise their operations and counts UK government departments among its major clients.

Last year the company had total staff costs of £261m, which included salaries and other payroll costs.

Mr Sloan said the plans for additional public spending should eventually benefit Kainos, given the UK public sector is a big customer.

Public sector revenue in its digital services division was £62m in the first half of 2024, down 15% from the same period last year.

Mr Sloan said that fall reflected a spending "hiatus" around the UK general election and the run up to the budget.

He said the business was confident of more opportunities in this sector but he was "cautious about the timing of future growth as we await the government moving out of the delayed decision-making phase."

Kainos is also continuing its international growth, signing its first contract in Australia in recent weeks.

Mr Sloan said there were around a dozen more contracts in the pipeline and an executive from the European division would be relocating to Australia to run the business there.