Warning as firms with lowest-paid workers will bear the brunt of Budget tax rises, finds analysis
FIRMS with the lowest-paid workers will bear the brunt of Budget tax rises, analysis has found.
Experts warn it will lead to fewer low-paid jobs being created, making it harder for the unemployed to find work.
The Centre for Policy Studies says the Chancellor’s National Insurance increases for employers make those with staff on the minimum wage pay £2,000 extra per worker.
They will have to stomach national insurance increases from 13.8 to 15 per cent next year, with payments starting when an employee earns £5,000, down from the current £9,100.
Researcher Daniel Herring explained: “The more of an employee’s salary is owed in tax — paid by the employee or employer — the more costly it is for businesses to create jobs.”
“By making it more expensive to employ people, the hikes in employer’s national insurance disproportionately affect the lowest paid or those who are looking to move back into work after being economically inactive.”
Meanwhile economists have warned some 17,350 shops could shut this year because of Labour’s tax-whacking Budget.
Experts braced Britain for a high street cull far beyond the 13,000 stores that closed during 2024.
The Centre for Retail Research said there was “worse to come” in the next 12 months as firms struggle to stay afloat.