Minimum Wage and NI increases will mean the “maths isn’t mathing” say small business owners

"A 6% rise in the Minimum Wage will unwittingly cause pain for those in minimum wage jobs. Where a business employs minimum wage people, it is usually to fulfill lower skilled jobs, or to give young people with no experience a chance without impacting the overall profitability of the company in order to provide that chance. A 6% rise would have minimum wage workers on a £23,600 a year salary based on a 37.5 hours a week job. With the standard 'a third: a third: a third' pricing model, this would mean this employee would have to be driving £70,800 revenue to avoid becoming a loss maker for the business employing them. To coin a phrase, 'the maths isn't mathing'."

""Labour is the party of business", Keir Starmer proudly stated in February, and in the last week or so Labour’s hesitation to clarify whether business owners can be considered working class has left many business owners feeling both frustrated and insulted. Now, to add insult to injury, many small businesses are faced with unbudgeted increases to their overhead structures that may potentially lead to closures if companies aren't able to pass on those additional costs. "

"Labour must increase the minimum wage to close the growing belief that they favour governmental workers and unions over private sector workers. With the increased costs and changes to employment laws, business owners will think twice before trying to grow their companies and workforce. This will slow the economy. My biggest worry is how these extra costs on businesses will affect inflation. Big monopolistic employers will increase prices to counter the cost increase, and smaller businesses will follow. This type of inflation will be unique to the UK and badly damaging to the country. "

"As a small business, we've grown by working with specialist freelancers located around the world. This year we've started hiring full time employees to complement this model, but if there is a hike in employers' NI on Wednesday, it will force us to consider whether growing a larger employed team is right for our business."

"The government appear to have engaged in a game of 'pass the parcel of fiscal responsibility', and small business owners are now unwitting participants. For weeks, Chancellor Reeves has desperately tried to present the forthcoming Budget as a masterclass in economic policy, but this latest focus on a minimum wage uplift, combined with the previous suggestions of an employers' NI hike, has revealed this as nothing more than an intricate exercise in buck-passing, artfully disguised as financial prudence. The economic burden of these proposals for SMEs cannot be overstated, and this comes at a time when many businesses are already facing severe cost pressures and a complete lack of confidence in the UK’s outlook. We in the business community were hopeful for a period of stability after years of inflationary concerns and growth worries. Yet we now find ourselves in the crosshairs at a time when fostering confidence is paramount in this increasingly hostile economic landscape."

"Minimum wage increases tend to uplift all wages, not just those on the minimum wage. The Budget is shaping up to be a perfect poisoned cocktail. Increased employer NI costs, increased employee rights and higher taxes for business owners will stifle the economy and increase inflation. This is hardly the recipe that was required."

"This has the potential to be a three-pronged assault on SME owners with the introduction of the Workers Rights Bill, a National Insurance hike and now a rise in the minimum wage. We are plunging into an era of massive taxation on businesses that will likely see the weakest fold to the detriment of the wider economy. While employees do deserve protection, this government does seem to be quite short-sighted as to the longer-term impact these policies will have on small businesses. This will definitely lead to restricted recruitment plans for businesses, as a gamble on apprentices and trainees especially may just be too expensive, and the HR too difficult to navigate, for employers to have the appetite to bother."

"Company owners considering growing their business with additional staff must rethink their strategy. Increased minimum wage costs, increased NI contributions and the impending change to employee rights will only deter that growth or simply those increased costs will be passed onto the end consumer. This will inevitably mean more unemployment and inflationary pressure in the future, by-products that no one wants."

"The anticipated 6% minimum wage hike, coupled with increased employers' NI, isn't just another number, it's a potential gamechanger for small business owners. For many of us running modest enterprises, this feels like trying to juggle while walking a tightrope in strong winds. While supporting fair wages is crucial, the timing and combination of these increases could force many small businesses to rethink their hiring strategies. The government's apparent disconnect from small business reality is concerning. It's not just about paying more, it's about sustaining viable operations. This could be the difference between expanding and simply surviving for many small enterprises. Perhaps it's time for Westminster to spend a day in a small business owner's shoes before making these sweeping decisions."

"This is deeply concerning on multiple levels. For businesses, a 6% minimum wage increase, coupled with higher National Insurance contributions, would squeeze already thin profit margins. Ultimately, consumers will bear the brunt of these changes, driving up costs and worsening inflation. With inflationary pressures still looming over the UK economy, these measures could turn an already challenging situation into a full-blown storm, pushing us further away from the economic recovery and lower rates that many were hoping for. If these rumours prove true, it will be a major setback."