Latest news with #Nics
Yahoo
27-05-2025
- Business
- Yahoo
Retailers expect more job cuts amid plummeting sentiment following tax rises
Retailers are expecting to hike prices, cut jobs and slash investment amid the sharpest drop in sentiment across the sector since the pandemic, according to a survey. Research by the Confederation of British Industry (CBI) suggested employment across retailers declined in the year to May, and headcount is expected to fall faster next month. Firms said they also expect to cut back on investment plans in the next 12 months, while they also anticipate that price rises will continue to accelerate in June, according to the CBI's quarterly industry gauge. Retailers have been hit by rising costs after the Government hiked company national insurance contributions (Nics), a tax which makes it more expensive to employ people, in April. The minimum wage also increased at the same time, while consumer confidence remains low after hitting a record low in April, according to some surveys. In the wake of the changes, confidence across the retail sector has fallen at the sharpest pace in five years. The CBI said a net balance of companies expecting business to worsen over the next three months standing at minus 29%, down from a reading of minus 19% in February. Ben Jones, lead economist at the CBI, said: 'This was a fairly downbeat survey and highlights some of the challenges facing the retail and wider distribution sector.' Firms are 'feeling the impact of higher Nics and the national living wage increase', he added. 'In contrast to other recent retail data, this survey suggests parts of the sector are still struggling with fragile consumer demand, though online sales seem to be holding up better. 'Our quarterly survey suggests that retailers are cutting back on hiring, scaling back investment and expect to increase selling prices at the fastest pace for over a year. The net balance of firms expecting a decline in headcount next month was minus 20%, while those expecting to scale back investment was minus 47%. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
BBC News
06-05-2025
- Business
- BBC News
India trade deal could undercut UK business, opposition parties say
India trade deal could undercut UK business, opposition parties say 9 minutes ago Share Save Jennifer McKiernan • @_JennyMcKiernan Political reporter, BBC News Share Save PA Media Sir Keir Starmer hosted a meeting of Indian investors and CEOs inside 10 Downing Street in December Opposition parties have criticised the new UK-India trade deal, saying it could undercut British businesses. One aspect of the free trade agreement, which Labour says will be worth £5bn a year to the UK, is extending an exemption on national insurance contributions (Nics) from one to three years. Known as the double contribution convention, this means people on short-term visas will not make social security payments in both the country they work in, and their home country, when working abroad. Conservatives, Liberal Democrats and Reform have claimed this could mean Indian workers become cheaper to hire than British workers - particularly when UK employer Nics have just been increased. The Indian government said the exemption was a "huge win" and an "unprecedented achievement" that "will make Indian service providers significantly more competitive in the UK". The UK has 16 agreements preventing double taxation of work, which cover more than 50 countries - including the US, EU and South Korea - and workers will still be required to pay the NHS immigration surcharge. Defending the deal, Business Secretary Jonathan Reynolds said the arrangement was limited and only applied to inter-company transfers of professionals between the UK and India. "This is something we have with a great deal of countries already," he said. "It's very specific as to who this applies to, and obviously if people were in the UK they would still be paying income tax, they would still be paying, for instance, the health surcharge and they wouldn't be eligible for benefits from the National Insurance system." Reynolds added that he believed the cost of the double contribution convention, as part of the trade deal, would be a "net positive" to the UK Treasury. The exemption will also apply to British staff, who are increasingly working away from home in India for large corporations. However, Conservative leader Kemi Badenoch claimed she had refused a similar trade-off when she was business secretary, because the deal contains "two-tier taxes" which will cost the UK "hundreds of millions". "I had this deal on the table as trade secretary and I refused to sign it because that double taxation agreement was unfair," she said. "It basically encourages workers from India but does not provide the same benefit to UK citizens." Pushed on the fact the UK has similar arrangements with other countries, Badenoch stressed that in those cases there were equivalent numbers of UK nationals working in those countries, whereas that was not the case with India, making the agreement "very lopsided" which would result in being a "net cost to the Treasury." Liberal Democrat deputy leader Daisy Cooper said the National Insurance plans were "half-baked" and risked damaging UK businesses' competitiveness, particularly in light of the global trade turmoil sparked by US President Donald Trump. "This deal risks undercutting British workers at a time when they're already being hammered by Trump's trade war and Labour's misguided jobs tax," she said. "The government's failure to even publish an impact assessment of these changes gives the impression of something that is completely half-baked. "It shows exactly why Parliament needs the opportunity to debate and vote on trade deals," Cooper said. Reform UK leader Nigel Farage described the deal as "truly appalling", adding: "This government doesn't give a damn about working people. "The Labour Party has, this time in a big, big way, betrayed working Britain." A Labour Party spokesperson said Indian nationals applying for jobs based in the UK would not benefit from the convention, so the tax break does not disadvantage UK workers. "This deal will provide an annual £4.8bn boost for British businesses, create more jobs, raise wages by more than £2 billion a year and bring down prices for hard-pressed consumers," the spokesperson said.
The Independent
02-05-2025
- Business
- The Independent
Next to reveal jump in profit despite rising costs and trade war uncertainty
Next is expected to post rising profits next week despite a string of costs increases hitting retailers and broader concerns about UK consumer confidence. The retail giant will reveal its first quarter results on May 8, hot on the heels of profits of more than £1 billion last year. Next, which has more than 450 stores across the UK, reported pre-tax profits of £1.01 billion for the year to January, up 10% compared with the previous year. Its boss, Lord Simon Wolfson, said trading in the opening part of this financial year had been better than expected at the recent update. Next raised its guidance for 2025-26 in response, pencilling in sales growth of 5% to £5.3 billion and profits up 5.4% to £1.07 billion. But Next, like other retailers, has had to contend with a slew of cost increases since it posted its full-year results in March. National insurance contributions (Nics), a tax which makes it more expensive to employ people, went up in April, along with the minimum wage. Meanwhile, UK consumer confidence has also fallen to the lowest level in more than a year amid concerns that Donald Trump's trade tariffs could push up living costs, according to a recent poll by data company GfK. And Next, which sells its products online to the US market, could also see a knock-on impact from Mr Trump's tariffs on sales. Russ Mould, an analyst at AJ Bell, said Next has a 'knack of exceeding expectations – a knack it demonstrated again in March when chief executive Simon Wolfson nudged up expectations for full-price sales and pre-tax profits for the year to January 2026'. He added: 'That positive steer has helped take Next's shares to new all-time highs, despite wider stock market volatility.' Shares were up 27% for the year-to-date on Friday. Next has already said it will have to raise prices by around 1% to offset the impact of Nics and minimum wage increases. Its first quarter results come amid a string of cyber attacks against UK retailers, with Marks & Spencer and Harrods facing issues in recent days. As of Friday morning, M&S was unable to process online orders after shutting down parts of its online systems to deal with a 'cyber incident'. M&S first reported the issue over the Easter weekend but has seen its operations impacted for more than a week.
The Independent
30-04-2025
- Business
- The Independent
Pub group Young's toasts bumper sales year despite rising costs and poor weather
Pub group Young's has reported rising annual sales despite a year of 'prolonged economic uncertainty' and volatile weather. The company said like-for-like sales rose 5.7% in the year to March 31, defying what it said were 'widespread challenges' for the sector. Pubs and retailers were still struggling with higher-than-usual inflation for some of last year, while more recently they were hit by rising employment costs from policies in the October Budget. Young's has previously said a rise in national insurance contributions (Nics) would cost it about £11 million extra per year, starting in April. But it also enjoyed a bump in sales from the Euros football tournament over the summer, and a boost from its £162 million takeover of rival City Pub Group in late 2023, which brought a further 50 pubs into the Young's business. And it previously toasted bumper trade over Christmas and new year, with sales across the festive period up 10.5% year-on-year. Chief executive Simon Dodd said: 'We achieved a huge amount during the past financial year, and I am extremely pleased with this performance. 'We delivered it against a challenging backdrop, which was characterised by unpredictable British weather and prolonged economic uncertainty driven by political turbulence through the year. 'Our performance demonstrates the strength and resilience of our premium estate, coupled with the work of our phenomenal teams. 'Together, these factors have enabled our business to continue to thrive and we remain confident in our ability to deliver profitable growth.'
BBC News
25-04-2025
- Business
- BBC News
Hairdresser fears she could lose her home over tax hikes
"I never wanted to do anything else but be a hairdresser," said Kerry Larcher, who opened her first salon when she was successfully growing her business in Hornchurch, in East London, over three decades, the 50-year-old says she now faces losing her life's work and her home. Tax rises in October's Budget are "crippling" her salon business, she said, and the extra £23,000 a year imposed by the chancellor could prove the final nail in the coffin. "I have been crying myself to sleep because, since October, this has been the worst period of my personal life in 30 years," she said."I feel ashamed to get into debt but we are gradually eating through our business reserves and I can't take wages if I don't make a profit."I could lose my house if the business folds - that is the reality and if things don't change it is frightening the life out of me." The government says the tax changes announced by Chancellor Rachel Reeves were needed to stabilise the say their plan to reform business rates will mean lower taxes for High Street businesses such as hair salons when it comes into effect in salon owners fear this may come too late to save their a client's hair, Kerry explained she could not afford to take on any new apprentices this year and had been forced to reduce the hours of her current 12 apprentices to the next step will be to halve the number of apprentices over the next year as their contracts finish, ending up with six by the end of this the business cannot recover over the next four years, the rest of her 28 staff, who are nearly all local women who became stylists after serving an apprenticeship at the salon, are facing potential redundancy."I'm having to drastically reduce my overall employee numbers to cut costs just to survive," she said."Where are the future hairdressers going to come from if good, employed salons go out of business?"Kerry added the way the chancellor is treating salons, which overwhelmingly employ women, "totally goes against the objectives of the government" in growing the economy and supporting of the pressure is coming from the UK's Value Added Tax (VAT) rules, which do not allow businesses to reclaim tax on staff costs in the same way they can for goods, putting labour-intensive businesses such as hair or beauty salons at a disadvantage. "If you look at a cafe, one waiter can serve several tables of four customers in the space of an hour and the cafe can reclaim the VAT on all the food and drink they serve," Kerry explained."Whereas one salon customer needs attention from the receptionist, the apprentice for hair-washing, and the stylist in that same hour and we can only claim VAT back on a tube of hair colour." Many hairdressers went into debt due to the pandemic, said Kerry, and the added pressures of increases in employer National Insurance contributions (Nics) and business rates are now threatening the future of salons across the Kerry's salon, the Vanilla Rooms, the tax increases have added a "devastating" £23,000 extra to her annual costs, through a combination of the threshold at which employers start to pay Nics on staff wages being lowered to £5,000 and changes to business Nics costs have risen 29%, from £42,000 to about £54,500 - now costing more than £1,000 a week - and business rates have gone up by 144%, from £700 to £18,000 a is one of 50,000 UK hairdressing professionals represented by the British Hair Consortium (BHC), which has urged Rachel Reeves to take action or face the "collapse" of the industry due to rising BHC argues the most efficient support the government could offer is through halving VAT for salons, because staff wages make up 60% of their association says cutting VAT could actually increase overall tax take, by preventing more workers going self-employed or entering the black market. Kerry's case was one of those raised by Conservative MP Julia Lopez in a debate this week in Parliament's Westminster Hall, where she urged Rachel Reeves to lower VAT from 20% to 10% to support the hair and beauty the MP for Hornchurch and Upminster, said Kerry was not alone in being forced to consider whether she will have to shut up shop completely. "Some the increased bills for salons are just unbelievable," she said, adding that women were disproportionately impacted by the changes."It's hard to ignore the impact, let alone the irony, of a chancellor celebrating herself for being the first woman to hold that office while simultaneously hammering the sectors that employ, serve and are often led, by women." Liberal Democrat business spokesperson Sarah Gibson agreed that Reeves' Budget had implemented "an unfair tax on jobs" and the government must offer tax relief for small businesses in said an increasing number of salons are opting to rent chairs out to self-employed staff, instead of employing stylists directly, to avoid paying tax."If salons don't get support we will see a huge increase in people becoming chair renters," she said, which reduces the Treasury's overall tax for the Labour government, Small Business Minister Gareth Thomas defended the chancellor's decisions in her October Budget as "important for long term stability".Salons are "a vital pillar of our high streets", he said, adding "many hair and beauty businesses will benefit from some of the other measures the chancellor introduced"."We increased the employment allowance so that almost one million employers pay no national insurance contributions at all. More than half of employers will see no change or gain from that package, and that includes many hair and beauty businesses," he told MPs. Sign up for our Politics Essential newsletter to read top political analysis, gain insight from across the UK and stay up to speed with the big moments. It'll be delivered straight to your inbox every weekday.
