Time is running out for Swindon companies preparing for the increase in National Insurance Contributions (NICs).

According to South West accountants and business advisers PKF, if you don't act now, you could be hit with a much bigger tax bill from April 6, whether you're an employer or employee.

Small and medium sized businesses will be hit hard by the one per cent rise a typical business with 100 employees will have to pay an extra £20,000 this year.

But PKF claims clever planning can lessen the blow. And it offers the following tips to avoid the NIC hike:

n Get your fair share. Issue shares to employees instead of salary increases, but make sure the shares are not readily convertible into cash or other assets, to be exempt from NIC.

n Planning ahead pays dividends. Once employees own shares, dividends paid to them are free of NIC, unlike salaries and cash bonuses.

n Save more for the future. Increase employer pension contributions or make the schemes non-contributory for employees an easy way to top up earnings free of NIC.

n A free lunch. Consider offering more benefits that are not liable to NIC, such as childcare vouchers, transport vouchers, vouchers associated with long service awards or towards lunch costs.

n Get wired up. Company mobile telephones and computer equipment provided for home use are NIC-free.

n Take a break. Increase the amount of paid holidays employees may appreciate this benefit as much, if not more, than a small salary increase.

n Flexible friends. Similarly, employees may be more motivated and fulfilled if they enjoy a better work/life balance through flexible working hours.

n Become your own boss. Consider whether you could become self-employed, as total NIC bills for self-employed individuals are only a fraction of the amount paid jointly by employer and employee - but be careful, it is not straightforward to achieve self-employed status.

Peter Penneycard, director of taxation at PKF, said: "NIC is a tax on jobs and small and medium sized businesses, which are the bread and butter of the UK economy, will be hardest hit.

"You can't hide from the NIC hike entirely, but there are ways to minimise the effects, such as using benefits that are exempt from NIC or altering pension arrangements.

"It's worth looking into these options to reduce business costs, particularly in the current uncertain economic climate and with the rising level of corporate insolvencies."