NI hike spells bad news for businesses
The forthcoming National Insurance hike could lead to the loss of thousands of jobs as businesses struggle to meet the costs.
A report by the British Chamber of Commerce (BCC) said that 20 per cent of companies are planning to cut staff to cope with the one per cent rise, which will cost business an extra £4bn a year.
But many fear this could spell the end of the road for small businesses, including pubs, which are finding it increasingly difficult to survive in the current economic climate.
Anita Adams, who runs the Golden Slipper and the Maltings in York, said she was very worried about the increase. "For me it will amount to a 10 per cent increase in expenditure which is quite an enormous cost to be hitting us at a time like this. It's another nail in the coffin for pubs - they have got to stop treating us like a cash cow."
In its pre-Budget submission to Chancellor Gordon Brown, the BCC has asked for a break for small businesses.
President Isabella Moore, said: "As current economic troubles and a looming war with Iraq are combining with the Chancellor's imminent rise in National Insurance contributions, British business desperately needs a break. "The burden of tax and regulation on business is eroding the UK's competitive advantage, costing jobs across the board."
The Federation of Small Businesses (FSB) and the Forum of Private Business (FRB) have joined the BCC in its call for help.
But it's not just the rise in national insurance that employers have to worry about. The business world is also worried by a number of other changes that are due to take effect from April 6.
These are:
- Working Families Tax Credit is scrapped and a new Working Tax Credit introduced for all on lower incomes
Maternity pay increases from £75 to £100 per week
Maternity leave increases from 18 to 26 weeks paid leave. Staff with more than six months service will be entitled to a further 26 weeks unpaid leave
New paternity leave introduced - two weeks at £100 per week
Adoptive parents given maternity and paternity rights
New flexible working rights take effect - all parents with children under six will be able to request to change their hours, reduce their hours or work from home. The request need not be granted but must be given serious consideration
New rules on working time for 16 to 18 year olds take effect - no more than eight hours a day or 40 hours a week. This can't be averaged unlike adult workers nor can individuals opt-out.
