The government’s proposed hike in NI contributions is causing more controversy and now leading business groups are calling for the charge to be retracted.
The Federation of Small Businesses, the BCC, the REC and the Forum of Private Businesses are just some of the organisations who have got together and called on their members to sign a petition recommending that the government rethinks the increase. They see it as a ‘tax on jobs’ and believe that the rise will discourage businesses hiring new staff. It may also have an impact on the financial benefits of using contractor umbrella companies.
The chairman of the FSB, John Wright, says that the group are asking the government to make it easier for SMEs to recruit staff. At the moment they are put off by the taxation system and the proposed 1% increase will only make the problem worse.
Not only is the proposed increase stopping small businesses recruiting, there are fears that up to 57,000 jobs in SMEs could be lost once the rise comes into effect according to the FSB. The CIPD also believes that 12% of employers will hire less staff and a further 8% will actually cut jobs if the increase goes ahead.
The British Chamber of Commerce says that the increase will actually reduce tax revenue and therefore do nothing to reduce the gap in public finances.
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