Manufacturing trade body Make UK has called for Chancellor Rishi Sunak to delay the planned 1.25% rise in national insurance contributions (NICs).
Make UK, which represents 20,000 firms of all sizes across the country, said the increase planned for April should be pushed back until the UK economy is in a stronger position.
It warned the government that pressing ahead would risk firms slamming the brakes on recruitment and putting the economic recovery from the COVID-19 pandemic at risk.
According to a Make UK survey of almost 300 manufacturing firms, as many as three in five said the tax rise would have a moderate or significant impact on their hiring intentions. Almost three-quarters said they would pass on, or would be very likely to pass on, the rise in their costs to customers in the form of higher prices for their products and services.
Stephen Phipson, CEO of Make UK, said: 'The proposed increase remains illogical and will be even more ill-timed given how circumstances have rapidly changed since it was announced.
'The cost burden on business is continuing to escalate and, while some of these increases are due to global events, government must avoid adding shooting business in the foot by an entirely self-imposed decision.'