NI increase 'a big chunk of money to find'

A north Devon businessman has said he will have to cut staff in response to a hike in National Insurance (NI) payments paid by employers.

NI contributions paid by employers changed from 13.8% to 15% on Sunday, with the threshold traders have to start paying the tax on salaries dropping from £9,100 per year to £5,000.

Rob Braddick, who runs bars, amusement parks and an arcade in Westward Ho!, said the changes would add about £180,000 to his yearly running costs.

The government had said it had taken "the necessary decisions on tax to stabilise the economy" and the changes would eventually raise £25bn per year.

Mr Braddick said his businesses usually employs up to 175 people in peak season but he would have to "shrink down" headcount and increase the cost of both food and drinks.

"We'll look a rotas and try and shave a bit here and there," he said.

"We have three bars, and we used to have a pool of people in each bar, but now we're going to have one pool for all three.

"We will have less staff, and if somebody leaves, I'm going to try and try and fill that gap without employing anybody else.

"It's going to be an interesting time, we'll do it, but it is a big old chunk of money to find."

Rick Turner, who owns The Big Sheep farm and theme park near Bideford, said people in the hospitality industry would be struggling with the NI hike and the increase in minimum wage.

"It's costing the Big Sheep about another £40,000 in National Insurance payments and payroll this year, so huge amounts of money," he said.

"We'll be employing fewer students, and we're looking to work with another business and share some staff.

"When young people's minimum wage has gone up by 16% for one age group, and 18% for another age group, that is a huge increase in a single year."

Angus Murray, who runs Pennywell Farm, a tourist attraction near Buckfastleigh, said the increase in the minimum wage was challenging but added it was "great for employees".

"They're a challenge, every business has them, you've just got to look at ways of overcoming them," he said.

"Hopefully it means that we are going to see growth and more productivity.

"It's great for employees that they're going up and you just hope you see that benefit long term completing the circle."

The government had said it appreciated the "vital importance" of small businesses to the UK economy, adding it had achieved a "great deal" since the last general election.

"We delivered a once-in-a-parliament Budget that took necessary decisions on tax to stabilise the public finances, including the NHS which has now seen waiting lists fall five months in a row," a spokesperson said.

"We are now focused on creating opportunities for businesses to compete and access the finance they need to scale, export and break into new markets."

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