Small businesses to face £2,600 in additional employment costs
The FSB has called on the chancellor to create a "pro-business Budget' as a result of new analysis on UK job creation...
Small businesses across the UK are set to be hit by rising employment costs from government policy in the 2017/2018 tax year, according to a new study from the Federation of Small Businesses (FSB).
The business organisation analysed its member companies and found that the average FSB employer will see employment costs rise by £2,600 as a result of increases in the National Living Wage and National Insurance contributions, alongside the roll-out of auto-enrolment pensions.
This “triple hit”, the FSB warns, could leave businesses struggling to meet extra costs and “could stop others from creating jobs altogether”.
On the back of the analysis, the FSB has called on chancellor of the exchequer Philip Hammond to build a ‘pro-business Budget’ – in advance of the Spring budget 2017 – that will boost jobs and long-term growth by enhancing employment allowance.
Additionally, the FSB has advised the government to create a statutory definition for the self-employed. It notes that there are now 4.8 million self-employed people in the UK; growth of 40%.
FSB national chairman, Mike Cherry, has urged the “government to show it is unashamedly pro-business”:
“Spiralling labour costs are now threatening [business] growth ambitions and hiring intentions. The Employment Allowance, created under the previous administration, has been a huge success and now it is time for this Government to build on that, and help us to create the new jobs and growth that this country needs.
“In short, we need more people to set themselves up in the business, not less.”