The boss of popular retail giant Next, Lord Wolfson, has warned that the first jobs that are offered to people in the future may become harder to find due to new tax changes implemented by the UK government. According to Wolfson, the increase in National Insurance payments that businesses will be subject to will have a particularly big effect on the retail sector, causing “the axe to fall particularly hard on entry-level jobs.” In order to avoid damaging employment figures too much, Wolfson called for a staggered implementation of the tax hikes, but the Treasury insists that implementing changes all at once will be better for business stability.
The government previously announced an increase to the National Insurance rate for employers starting in the coming months, as well as a decrease to the starting threshold for the tax. With changes also planned to the National Living Wage, the retail sector as a whole is concerned that businesses which rely heavily on part-time or low-paid workers will be the hardest hit. Wolfson used Next as an example of a company that will likely have to cut back on employee hours worked in the face of a £70m rise in its wage bill.
The Next boss does not believe that retailers will be the only ones to feel the hurt of the latest tax changes, and it will be hard for the economy as a whole to deal with the prospect of rising costs for lower-paid staff. Stating that “it’s very difficult to see how such a big increase in the cost of entry-level work is going to result in anything other than a reduction in the number of opportunities available”, Wolfson urged the UK government to reconsider how they will handle future increases.
The new tax hikes have already received criticism from a number of UK companies, and according to a recent report from the British Chambers of Commerce, pricing pressure on goods and services may eventually result in job losses
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