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Businesses Welcome Plans to Scrap Rise in NI
Listed under: News
Published: Wednesday, May 19, 2010
The new Government's decision to dismiss the one percent increase in national insurance (NI) for many staff members has been welcomed by a number of the country's leading business support groups, with the Forum of Private Business (FPB) suggesting it could be the key to leading Britain out of it's economic difficulties over the next year.
Hailed a 'tax on jobs' and initially scheduled to take effect in 2010, the proposed rise in NI would have made it considerably more difficult for independent businesses to recruit new employees, seeing many of them rethink their existing staff numbers and delay, if not halt, plans to expand their teams.
Although the one percent rise in NI will still impact individuals earning more than £20,800 – seeing their costs rise by as much as £12 per week – the higher threshold will inevitably mean many smaller retailers remain unaffected.
With a recent report from the Forum revealing that approximately 43% of companies would identify the cost of employment as the joint biggest barrier to recruitment, along with the current economic climate, the Government's decision to scrap the proposed plans is likely to be welcomed by retailers nationwide.
Commenting on the findings, Phil Orford, chief executive of the FPB, says, “Small businesses did not want this tax on jobs because clearly it would have been a major barrier to staff retention and job creation, and hindered economic recovery.”
He adds, “For the majority of employers it would have proved to be an unpopular and unworkable tax rise. Although not perfect, the new coalition Government's policy on NI is far better, and provides a degree of certainty for business growth, now and in the future."
Hailed a 'tax on jobs' and initially scheduled to take effect in 2010, the proposed rise in NI would have made it considerably more difficult for independent businesses to recruit new employees, seeing many of them rethink their existing staff numbers and delay, if not halt, plans to expand their teams.
Although the one percent rise in NI will still impact individuals earning more than £20,800 – seeing their costs rise by as much as £12 per week – the higher threshold will inevitably mean many smaller retailers remain unaffected.
With a recent report from the Forum revealing that approximately 43% of companies would identify the cost of employment as the joint biggest barrier to recruitment, along with the current economic climate, the Government's decision to scrap the proposed plans is likely to be welcomed by retailers nationwide.
Commenting on the findings, Phil Orford, chief executive of the FPB, says, “Small businesses did not want this tax on jobs because clearly it would have been a major barrier to staff retention and job creation, and hindered economic recovery.”
He adds, “For the majority of employers it would have proved to be an unpopular and unworkable tax rise. Although not perfect, the new coalition Government's policy on NI is far better, and provides a degree of certainty for business growth, now and in the future."
