UK businesses shocked by unexpected tax changes that affect part-time workers
Labourʼs first budget in over a decade brings major changes to employer costs starting next spring. New tax rules will significantly impact businesses hiring part-time staff‚ with some facing up to 73% cost increase
The business community got an un-expected surprise during Labours first budget presentation in more than 10 years. The new rules hit companies with part-time workers extra-hard (making many re-think their hiring plans)
Stephen Burns‚ Hollywood Bowlʼs top-boss took a break from his Greece trip to watch the budget live-stream; what he saw made him un-happy. “We were very disappointed and thats putting it mildly“ he says about the changes that will affect his 2‚600 workers
The new rules bring a double-whammy for employers: the National Insurance rate jumps to 15% and the payment threshold drops to £5‚000 from £9‚100. This means companies must pay more tax for each worker; especially impacting those with part-time staff. UK Hospitality data shows some businesses will see their costs go up by 73%
- Minimum wage increase of 16% for young workers
- New £5‚000 threshold affects 8-hour weekly workers
- About 940‚000 employers will lose money
- Only 250‚000 businesses might benefit
Jonathan Greatorex‚ who runs Hand At Llanarmon hotel says the changes will cost him £30‚000 yearly: “The impact for a business like ours is really quite terrifying“
The recruitment sector sees problems too. Neil Carberry from the Recruitment and Employment Confederation points out a case where one companys annual costs will jump from £375k to £657k; wiping out their profit. This makes entry-level jobs harder to create — affecting those who need work experience most
