Despite her pledge to keep taxes “for working people” the same, Chancellor Rachel Reeves is planning to increase employers’ national insurance contributions in order to help close a £40 billion budget deficit during the Labour government’s Wednesday budget.
The government has previously said that the national living wage, which is the lowest amount that an individual aged 21 and above can be paid, will rise by 6.7% to £12.21 per hour starting in April, while those aged 16 to 20 will receive a 16.3% increase to £10 per hour.
According to small business owners who spoke to News, some enterprises would be severely impacted by the combination of rising costs in recent years, the increase in the minimum wage, and the increase in employers’ national insurance contributions.
Michelle Ovens, the founder of Small Business Britain, an organization that supports the 5.1 million small businesses in the UK, cautioned that if they continue to experience this kind of strain without government assistance, an increasing number of them will fail.
She stated that the hospitality sector will be one of the most affected, and a hair salon owner was on the verge of tears as he explained how the changes might be “the nail in the coffin” for his business.
