National Living Wage (NLW)

A Quarter Of Businesses Put A Hold On Any Promotions In Order To Afford National Living Wage

A Quarter Of Businesses Put A Hold On Any Promotions In Order To Afford National Living Wage

A quarter of UK small businesses have put a hold on any employee promotions or pay rises because they can’t afford the national living wage – according to a report by XpertHR. The survey of 212 businesses and 541,340 employees has revealed that 30% of firms had to increase pay for at last some workers in April 2016 – when the minimum wage officially rose from £6.70 to £7.20. At the time of its introduction, workers eligible for the national living wage (who were previously on the national minimum wage for workers aged 21 and over) would have seen their pay increase from £6.70 to £7.20 an hour, an increase of approximately 7.5%. It’s suggested that many businesses failed to plan adequately, or even expect, the rise – and it now appears business owners are taking their financial frustrations... »

Calls For National Living Wage To Be Scrapped

Calls For National Living Wage To Be Scrapped

Calls have been made to scrap plans for the National Living Wage (NLW) as it’s suggested its implementation could lead to unemployment. A report from the Adam Smith Institute says that as businesses will need to fund the wage increases themselves, there’s a possibility they’ll hire fewer workers, automate certain processes, rise consumer prices or outsource their work abroad to make up the costs. If prices are increased, it’s argued that this will disproportionately affect the least well off in society as the cost of living will be increased. Around 5% of the UK workforce is currently paid the minimum wage, but this proportion is set to grow as the NLW rises from £7.50 in 2017 to £9.02 by 2020 Sam Bowman, executive director of the Adam Smith Institute and co-author of the paper, said: “We ... »

National Living Wage Placing Financial Strain on 60,000 Businesses

National Living Wage Placing Financial Strain on 60,000 Businesses

Almost 60,000 UK companies that had to introduce the National Living Wage (NLW) on April 1 were already in a “dire” financial state before the new regulation was introduced, research from insolvency firm Begbies Traynor has reported. The new NLW requirement sets a higher minimum income level for employees aged over 25, now set at £7.20 an hour. According to its Red Flag research, 59,608 businesses in industries most impacted by the new NLW – predominantly those in retail and leisure – ended the first quarter of 2016 in “significant financial distress”; a 20% increase on the same period last year. Begbies Traynor have warned that the date could indicate a rise in business closures over the coming months as companies struggle to afford the higher staff cos... »

Small Businesses Advised to Take Action to Comply with New National Living Wage

Small Businesses Advised to Take Action to Comply with New National Living Wage

Small business owners are being urged to take action to ensure they comply with the new National Living Wage (NLW) in a report by Jelf Employee Benefits. The new NLW requirement sets a higher minimum income level for employees aged over 25, rising to £7.20 an hour from April 2016. While this element is generally understood, the interaction with the use of Salary Sacrifice in employee benefits provision appears to be an unknown problem for many businesses and the report has suggested that employers may inadvertently breach the new minimum income level when it comes into effect. The survey found that only 9% of employers have reviewed Salary Sacrifice usage against new NLW requirements with almost four in 10 employers (39%) unaware of there even being an issue. While 19% were aware of the po... »

Small Businesses Starting to Lose Confidence in Government

Small Businesses Starting to Lose Confidence in Government

A large proportion of UK small business owners are frustrated with the lack of government support with many worried about the negative effect taxes on dividends and the new National Living Wage (NLW) could have on their business. The research by Smith & Williamson, as part of its latest quarterly Enterprise Index, found that the number of small firms that are dissatisfied with the government’s level of support has risen by 10% in the last three months to 30%. Companies stated that, while “broadly supportive” of David Cameron’s government, they were disappointed with the new mandatory NLW (which will rise to £7.20 from April 2016) and the new dividend taxes. Announced in the summer Budget, the dividend taxes will  mean that basic-rate payers have to pay tax on dividend income. This new ... »