BRITISH businesses are in no mood for laughing this April Fool’s Day as a huge burden of extra costs lands on their doormats.
Small and big firms alike are bracing to be whacked with an onslaught of higher bills caused by Chancellor Rachel Reeves’s brutal Budget last October.
Rachel Reeves’ brutal budget is likely to cause higher bills to businesses[/caption]
Companies have warned that the changes will drastically impact part-time workers, which become 13 per cent more expensive overnight[/caption]
From today, the basic wage for workers aged over 21 will increase from £11.44 to £12.21 — instantly hiking staffing costs.
But most firms are more concerned about the dramatic changes to employers’ National Insurance Contributions, which will make hiring even tougher.
Companies have warned that the changes are to drastically impact part-time workers, soon to become 13 per cent more expensive overnight.
The contributions will go up from 13.8 per cent to 15 per cent from April 6, but the main impact comes from lowering the threshold it starts being paid at from £9,000 to £5,000, roping in many more part-time staff.
One FTSE chief executive told The Sun that it was “completely the wrong strategy for the Government to be pursuing if they want to encourage more people back into work with flexible jobs”.
Meanwhile, firms have also been slammed with higher business rate bills.
Smaller pubs, shops and restaurants have been receiving 75 per cent rate relief but this falls to 40 per cent starting from today.
Put another way, they will go from paying 25 per cent of bills to 60 per cent.
The average small pub saw its rates bill rocket by £7,000 overnight to £12,122.
All the changes amount to a “£5billion bombshell”, the British Retail Consortium claims.
Meanwhile, a slew of reports suggest companies are already cutting jobs, freezing hiring and preparing to hike prices, with inflation predicted to hit 3.5 per cent later this year.
At the same time, firms are fearing global supply issues from Donald Trump’s tariffs, including a 25 per cent tariff on car exports to the US.
But some British firms say it is unfair US tech bosses could be given tax concessions in a bid to woo the White House.
Hoping to stave off the worst, firms are lobbying for a business rates reform, and a watering down of the looming Employment Rights Bill.
ASTON IN F1 PIT STOP
ASTON MARTIN LAGONDA plans to sell its minority stake in its F1 racing team in an effort to rev up the luxury car brand’s finances.
Lawrence Stroll, majority owner of the Aramco F1 team where son Lance drives, is Aston Martin’s exec chairman and biggest shareholder.
Aston Martin Lagonda is planning to sell its F1 racing team minority stake in an effort to rev up the luxury car brand’s finances[/caption]
Lawrence Stroll, majority owner of the Aramco F1 team where son Lance drives, is the car firm’s biggest shareholder and exec chairman[/caption]
He is planning to pump in £52.5million by selling shares to his investment vehicle.
The F1 stake sale will net £74million.
Shares at Aston Martin, hit by poor sales, profit warnings and US tariffs, closed up 7 per cent at 69.85p.
WOOD’S FOR THE FREEZE
OIL services firm Wood Group faces its shares being suspended next month after it admitted it will have to restate accounts due to “unreliable information”.
The company, which has already seen its shares tank by three- quarters in the past year, said a probe by Deloitte had found “inappropriate management pressure”.
It led to inaccurate financial statements as well as “information being inappropriately withheld from auditors”.
It will restate accounts for the last three years and continues to be in takeover discussions with Dubai-based Sidara.
OIL’S NOT WELL ON TAX PLAN
THE Government is coming under fresh pressure to axe the North Sea windfall tax or risk scrapping domestic oil and gas production when renewables are not ready to fill the gap.
A North Sea Transition Taskforce, backed by the British Chambers of Commerce, has said that current policy risks firms dismantling production and scrapping investment, which will also result in lower revenues for the Treasury.
The Government is coming under fresh pressure to axe the North Sea windfall tax[/caption]
The Government confirmed the 78 per cent tax on energy profits would continue to 2030.
The taskforce says this is a “wait too long”.
The report says the damage will also dismantle the domestic supply chain, making it even harder to transition to offshore windfarms.
Taskforce consultant Trevor Garlick said: “The UK’s world-class offshore supply chain is at risk. Investment is declining in the oilfields at the same time as windfarms are deferred.”
IT’S RUFF FOR PETS
PETS AT HOME was in the dog house with investors yesterday after giving its second profit warning in four months.
The firm warned a “subdued, uncertain” consumer environment would knock profits down to between £115million and £125million from the market consensus of £125million.
And its operating costs will rise by 5 per cent this year.
Shares slumped by more than 8 per cent to 216.8p yesterday, valuing it at £995.2million.
