I CAN’T LET THIS GO: All the talk about the increase in ENIC has been about the 1.2% increase, not the shift in Threshold. Was this done on purpose? I haven't seen a single commentator, newsreader or "industry titan" who seems to understand the basic impact of it. So here it is: Every employer now pays an extra £615 in ENIC tax for every single member of staff earning more than £9,100 PLUS an extra 1.2% on every pound paid over £9,100. And this is outside of the increase in pay - it's nothing to do with inflation. It’s just new tax. The Threshold shift is so great that the impact is only matched by the 1.2% increase, when the salary is over £56,300. If you have staff working 15 hours at £12.21 the annual ENIC per employee used to be £58 per annum. With the new threshold it's £679 - an increase of 1070%! And we wonder why restaurants and bars are failing - and why supermarket prices will go up. Yet it's been swept under the carpet and nobody seems to have realised.
It’s all designed for far more obscure reasons than the increased financial burden to businesses. People are thinking basic and focusing towards the hurt in the wallet. People are confused and baffled by this move, they cannot understand why the government would create so much hurt to businesses and are beginning to realise the damage it will do…….smoke screens - what is the government’s agenda or long term strategy. Small businesses will now fail and the corporates will flourish even more. They can afford to invest in AI/robitics because it’s cheaper than a human. I remember during the pandemic driving past my local Mac Donald’s and the car park looked like a Toyota Prius dealership….Uber eats suddenly became relevant overnight as did Amazon and Netflix, more so than they was prior. What is the shift?
For our business it’s a £200k per annum increase in cost for around 150 employees. What is most concerning is it disproportionately increases the cost of employing a lower paid employee vs a higher paid employee. A £21k employee the effective nic tax rate increases from 8.6% to 12.3% a 43% increase. A £56k employee the increase is 18%. The impact will be most felt among lower paid employees and smaller businesses eg pubs restaurants etc. Not really growth inducing is it.
We’re in manufacturing at SALESMADE LIMITED with 30-35 employees the increase is around £48k. The increase to minimum wage will push this up further come April. It’s almost the equivalent of 2 full time staff on minimum wage. I don’t understand how this will promote growth and strengthen SME’s like ours? Combined with the 6% increase in Corporation tax last year, where is the incentive?
I don’t know why you’re complaining Nick, all that extra money you’re paying is going straight into the pockets of BMA and RMT members. It’s reminiscent of the power cuts days of Harold Wilson and his repeated acquiescence to Scargill and the NUM. Wilson liked to gaslight the electorate with stories of alleged prior economic mismanagement by his Tory predecessor too. Scargill was another union leader who was only interested in cash irrespective of his employer’s ability to pay. We know what that particular Labour government gave rise to and it wasn’t pretty for Scargill or Wilson when the reckoning came. Keir needs to be careful with the politically ambitious albeit economically illiterate in his ranks. I suspect Badenoch is champing at the bit.
Nick, thanks for enlightening us but one point you raised in respect to prices in supermarkets going up, don't they make enough money of off the back of us especially Tesco whose profits are billions, to pay this although I don't agree with it like most of that which Labour have done.
Tons and tons of commentators. You haven’t been keeping up.
Well noted Nick Snowdon . How does this work with "fairer Tax" or working man will not see paye tax rate increase nor a nationsl insurance increase when it hits every employed payrolled. It is a direct increase on the cost of employment and as you have indicated massively biased to the middle and lower income earners.
Thanks for crystalising the financial side on this Nick Snowdon. I’ve talked about “the increase” in some previous posts knowing about this and it being a hunky % - but not in as much detail as this, which is so useful and paints the picture of how impacting this will be. It’s not a good look and awful imo.
Founder & Talent Hunter - 17+ Years Headhunting & Recruitment Industry Experience
2wThe likes of John Caudwell said that the reason he was voting labour was because the Tory’s didn’t deliver growth…he’s now come out and kind of criticised the budget but kind of didn’t. He just cannot bring himself to realisation of the monumental error of judgement he has made in backing this lot. “But the Tories did this, the Tories did that, 14 years…” At least they had a few brain cells amongst them and talked up business. I would love for anyone to point me in any direction of positivity or enthusiasm reference where labour are doing anything for the economy.