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UK Businesses Warn of Closures Amid National Insurance Hike

Chancellor Rachel Reeves faces backlash as increased employer contributions threaten care homes and hospitality sectors.

Overview

  • Care homes and GP surgeries warn of potential closures due to increased national insurance contributions, which could severely impact vulnerable populations.
  • More than 200 hospitality leaders, including major chains like JD Wetherspoon and Whitbread, have expressed concerns about 'unsustainable' tax hikes leading to job cuts and venue closures.
  • The new tax policy raises employer contributions from 13.8% to 15%, with the threshold for liability dropping from £9,100 to £5,000 annually, effective April next year.
  • Critics argue the tax increase disproportionately affects part-time and low-wage workers, potentially slowing wage growth and making some jobs unviable.
  • The government defends the tax changes as necessary to address a fiscal deficit and support public services, despite warnings from the Budget Responsibility about potential cost pass-through to consumers.