THE new tax rise on businesses kicking in tomorrow could turn high streets into ghost towns, top Tories have warned.
Family firms could cut hours and freeze wages as Chancellor Rachel Reeves raises National Insurance contributions to 15 per cent.
Tories have warned the tax hikes for businesses, that are coming in on Sunday, will turn high streets into ‘ghost towns’[/caption]
Chancellor Rachel Reeves’ tax hikes for businesses have been described as ‘a devastating blow to our high streets’ by Shadow Chancellor Mel Stride[/caption]
Business groups say the extra cost of hiring staff will make it more difficult to create and sustain jobs.
Combined with rising minimum wages, it may also hinder efforts to get young people into work.
Shadow Chancellor Mel Stride said: “It’s a devastating blow to our high streets, turning many centres into ghost towns.
“Shopkeepers will have to make painful choices — laying off staff, freezing wages, shelving investment plans, passing costs on to customers, or closing for good.
“In many towns, this could be the nail in the coffin for already struggling businesses.”
UKHospitality says the sector will pay an extra £1billion in NICs.
A further £500million of costs will come from business rate relief being lowered, and rises in the minimum wage will add £1.9billion to firms’ bill.
The Federation of Small Businesses’ Craig Beaumont said: “Every job will be more expensive to create and sustain.
“For each business employing more than four people, over one-seventh of earnings will be added on each job and sent to Treasury coffers.
“Higher NICs cut pay rises and hours, but also push up prices for consumers.”
