Telford firm MyWorkwear facing '£100k in added costs' after National Insurance changes

Businesses currently pay National Insurance Contributions(NICs) a rate of 13.8% on employees' earnings above a threshold of £9,100 a year, set to rise to 15% on April 6, one of several changes announced in last year's autumn statement by the Chancellor Rachel Reeves designed to raise around £25 billion for the treasury. 

A week before the changes kick in, a new study conducted by the Telford-based firm MyWorkwear has revealed that 72% of businesses are actively concerned about the upcoming increases to NICs and increase in minimum wage - with 68% explaining that they expect to pass these increased cost rises onto their customers.

Nearly half of businesses (44%) answered ‘yes’ when asked whether they had concerns that their business would struggle to survive the next five years because of escalating costs.

MyWorkwear, which supplies workwear, uniform and PPE from its Halesfield base, says it's facing increased costs of around £100,000.

“We tend to be a pretty good barometer for economic sentiment and the findings of our report strongly echo the feedback we’re hearing from customers in that businesses are struggling and concern is growing about the future of the UK economy,” commented Co-Managing Director James Worthington.

“As well as increasing costs from employer national insurance contributions and increased minimum wage, the report noted that inflation rates are playing a huge concern in business owners' worries as well as a lack of skilled labour.

“The inflation rates we are experiencing ourselves are causing us to look at new commercial activities and new pricing structures to try and find ways to absorb the price hikes that are in addition to our usual standard annual price increase”.

Over 60% of respondents explained that they were investing in automation and technology instead of people. This was echoed by 57% saying they had shelved plans for recruitment and 28% having made plans for redundancies.

In a spring statement delivered last week, the Chancellor decided not to roll back any of the planned changes despite criticism from the business community in the wake of last year's announcement.

Ms Reeves instead announced a further £2.2bn in defence spending, while also targeting a reuction in the administrative costs of government departments by 15% by 2030.

"I won't shy away from the challenges we face, and change won't happen overnight," she said. 

"But the prize on offer to us is immense."