The London Standard's analysis of Government statistics reveals that approximately a fifth of Rachel Reeves's £25 billion annual NI hike on employers will drastically impact the capital. This will particularly hurt labor-intensive sectors like hospitality and retail, exacerbating the already struggling high streets and town centers.
Business owners express discontent at the new National Insurance rates, emphasizing that they are still reeling from pandemic impacts and the cost of living crisis. With the employer NI rate steeply rising from 13.8% to 15% and the threshold decreasing from £9,100 to £5,000, many fear job cuts, hiring freezes, and increased operational costs.
A hotelier articulated deep frustration over the changes, stating, 'It's not a s*** show, it's far worse than that.' The sentiment reflects widespread concern among hospitality leaders who see the new tax structure as a devastating blow amidst existing challenges.
With the hike expected to add £615 to the cost of employing each staff member, smaller businesses fear they may not withstand the financial strain. Many leaders argue that the timing couldn’t be worse given the ongoing recovery from multiple disruptions including transport strikes and the ongoing energy crisis.
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