Firms big and small slam Chancellor Rachel Reeves for saddling them with extra costs in her Budget
FIRMS big and small have slammed the Chancellor for saddling them with extra costs in her Budget.
They say Rachel Reeves’ hike in taxes, despite a vow to be “pro-business”, contradicts her growth agenda.
Even the Budget watchdog reckons more than three quarters of firms will have to react by lowering wages and freezing hiring.
Employers’ National Insurance Contributions (NICs) will rise from 13.8 per cent to 15 per cent. And reducing the threshold means firms will have to pay NI as soon as a worker earns £5,000.
For staff on £30,000, an employer will have to pay an extra £865. The minimum wage increase will also add £1,400 a year per worker.
Small firms who receive 75 per cent business rates relief will see it slashed to 40 per cent, adding £688million in costs next year.
Entrepreneurs will face higher rates when selling their business, with capital gains tax rising from 20 per cent to 24 per cent.
CHRIS JOWSEY
CEO, ADMIRAL TAVERNS, PUB CHAIN
WE welcome the Chancellor’s announcement to cut draught beer duty, yet pubs remain overtaxed and the cost of doing business is only rising for publicans.
It is even more important now that the Government uses the next two years to implement a proper reform of business rates.
NICK STOWE
MONSOON ACCESSORIZE, FASHION RETAIL
THIS is a disappointing Budget for retailers. We’d hoped for a reduction in disproportionate business rates; nothing has changed in the immediate term.
Instead, the Government has loaded more cost and tax on to businesses. Retail is the largest private sector employer in the UK.
The NI rise will hit hard and will directly impact our employees, forcing lower wage increases and less hiring.
ROMI SAVOVA
CEO, PENSIONBEE, PENSION CONSOLIDATOR
THE decision to raise the NI rate poses risks not only to business stability but millions of working people.
For employers, particularly small and medium-sized businesses, this added burden could spell the difference between survival and shutdown.
This measure could act as a tax on work, creating a domino effect that may stifle growth.
ANDY CURRAN
CEO, STANDARD LIFE, LIFE ASSURANCE
PENSIONS were a low-key feature of Reeves’ speech — the radical changes floated were thankfully left out.
In recent weeks we have seen customers act on speculation about tax-free cash allowances and it is important we have a period of stability.
The Government needs to encourage greater savings because, at present, just one in seven people are on course for a decent standard of living in retirement.
PHILIP BELAMANT
CEO, ZILCH, FINTECH FIRM
WHILE we’ll all absorb slight tax increases, the UK is a top G7 competitor and the world’s third-largest tech market.
Clear communication with businesses about long-term plans is key. The Chancellor said she wants to end short-termism and pivot toward bold thinking to drive growth.
It’s time to spend wisely and introduce policy reforms that close the fiscal gap without raising taxes further.
STEVE CLARKE
BOSS, TEEPEE ELECTRICAL, CABLE HARNESS MAKER
YESTERDAY’S Budget undoubtedly curtails ambition.
Some of the tax rises announced will add approximately £140,000 annually to our expenses, inevitably driving up our prices in an already competitive market.
Some of the decisions the Chancellor has made will negatively influence critical decisions around spending on new technology and hiring.
BEKKI PHILLIPS
BOSS, IN-COMM TRAINING, ENGINEER TEACHING
THE NI contributions increase and threshold reduction is a painful double whammy.
It could certainly curtail some of our investment plans.
From a training perspective, I hope the creation of Skills England and the £240million put aside for trailblazer projects will help bring about much-needed changes with the apprenticeship levy, mainly to help widen what training businesses can access.
ADRIAN HALLER
BOSS OF BRUDERER, MACHINE MANUFACTURER
AS a manufacturer we tend to be a good bellwether for the UK economy because if things are good, companies invest.
But the increase in NICs for employers and the unexpected lowering of the threshold are two painful blows and will be exacerbated by the increase in the National Minimum Wage.
The latter will have a far-reaching impact as it will squeeze salary boundaries.
Next for £1bn list
FASHION giant Next predicts its profits could hit £1billion for the first time ever this year.
The retailer said shoppers came in to expand their winter wardrobe — helping sales rise by 7.6 per cent, and beating expectations of a 5 per cent lift.
As a result, it hopes to make £995million to £1billion profit.
Only three British retailers have ever achieved £1billion in profits: Tesco, Marks & Spencer, and B&Q owner Kingfisher.
Next believes spending may have pulled forward profits from the Christmas season, but its predications are known for being overly cautious.
Jab blow hits GSK
DRUGS giant GSK suffered a sharp slowdown in revenue from its blockbuster vaccines in the third quarter, dampening overall sales growth.
Sales of GSK’s jab for respiratory syncytial virus, previously a key driver of sales, plunged 72 per cent year-on-year to £188million, on the back of fewer of the shots being given out in the US.
Shares in GSK fell by 4 per cent yesterday after the pharmaceutical firm said sales in its vaccine business would fall this year, rather than rise.
Boss Dame Emma Walmsley had hoped inoculations would massively drive growth.
Less loss at Aston
ASTON MARTIN LAGONDA has narrowed its losses by 90 per cent in the last quarter.
The firm said losses dropped to £12.2million in the third quarter, against £117million in the same period a year ago.
It sold 1,641 cars in the quarter, 14 per cent up on last year, helped by sales of its Vantage and DBX707 models.
However, its total volumes for the year to date are still 17 per cent lower than last year, partly due to a slump in demand in China.
Revenues rose by 8 per cent to £391.6million — but its debt pile has ballooned by two thirds to £1.21billion.