MY BUSINESS COSTS ROSE BY £48K THANKS TO NI AND WAGE HIKES – I’VE HAD TO CUT STAFF

Salon owner Collette Osborne has already had to cut staff because of Labour’s recent tax rises on businesses.

The 54-year-old says she has “nothing left to give” after having to reduce staff numbers further just so her business survives.

Ms Osborne, who owns two hair salons in Nottingham, used to have 38 employees and hired at least four apprentices a year.

She now only has 26 employees and is no longer able to take on any new apprentices due to a perfect storm of national insurance (NI) hikes on employers, national minimum wage (NMW) increases, and the “constant strangulation” of Covid loans.

Speaking to The i Paper, the mother-of-two said: “I have dozens of applications weekly from young school leavers who want to be hairdressers but cannot find any salons taking on apprentices right now because of the tax hikes.

“Sadly, we have also had to make redundancies. The NI rise and NMW hike meant our costs increased by nearly £48,000 so we had to find savings.

“We had to lose a key manager and stop recruiting apprentices. We also had to reduce current apprentices’ hours by 20 per cent.”

In the autumn Budget, Rachel Reeves announced the rate of employers’ NI contributions would increase from 13.8 per cent to 15 per cent from 6 April. The level at which employers start paying NI contributions was also reduced from £9,100 to £5,000 per year.

On top of this, the NMW rose to £12.21 per hour for those 21 and over, £10 per hour for those aged between 18 and 20, and £7.55 per hour for 16–17-year-olds and apprentices.

As a small business owner, Ms Osborne said she was invited to a closed hustings event before the election last summer to meet the Chancellor and discuss her plans.

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She added: “I had 10 minutes with the Chancellor, and I told her all of the things we’ve been going through.

“She assured me she would back businesses and deal with the wide tax gap and said that she would not levy more costs onto businesses.

“She wanted my vote and sadly, I fell for it. So, imagine when I watched the Budget in October to my horror.

“Not only did they not back businesses but they killed any chance of recovery let alone growth.

“I was and am still in utter despair. I sat with my head in my hands and could not quite believe the Chancellor was widening the tax gap when she promised pre-election to close it.”

It comes as a third of business owners are planning further job cuts following April’s increase in NI contributions, according to accountancy firm S&W’s business owners’ sentiment survey.

It found that approximately 20 per cent of businesses have already reduced staff numbers as a direct consequence of the NI contributions changes that took effect in April.

And 33 per cent of business owners said they are still planning further staff reductions in response to the tax increase.

The pandemic hit many business owners hard, and many, like Ms Osborne, are still recovering.

She said that Covid “killed” the industry and meant she had to take out loans to keep trading.

Ms Osborne said: “We thought we could trade out of it; little did we know it would be two years of constant disruption which costs us in so many ways.

“We wanted to do the best by our staff, so we took out loans to pay our staff 100 per cent during the pandemic. Now, we’ll be paying them off until 2030.”

Times are tough, and the impact has been “huge”, she said. Emotionally, she said she has “nothing left to give”.

She continued: “I am being penalised as an employer for trying to do the right thing and am in disbelief that the Government feel taxing employers out of existence is somehow growth.

“It is clear to me that no minister has ever had to walk in a small business or any business owner’s shoes, or they would have a very different view.

“I don’t want to be an employer anymore, what’s the point when the whole system is stacked against you.”

A government spokesperson said: “We are a pro-business government. Economic activity is at a record high with 500,000 more people in employment since we entered office.

“We are protecting the smallest businesses from the employer NI rise, shielding 250,000 retail, hospitality and leisure business properties from paying full business rates and have capped corporation tax at 25 per cent – the lowest rate in the G7.

“We are now focused on creating opportunities for businesses to compete and access the finance they need to scale, export and break into new markets.”

2025-06-20T05:36:01Z