What’s Going On?
On the 7th September, PM Boris Johnson stated that across the UK starting from April 2022 there will be an increase to the National Insurance by 1.25 percentage points. This increase is set to raise over 36 billion pounds over the next three years which will then go directly to funding health and social care.
This levy will be shared with both people and businesses, as both entities benefit greatly from the use of the NHS – both personally and as part of the workforce. Effectively the tax raise is a burden shared between businesses and their employees, contributing together 2.5%.
These changes are drawing criticism from the electorate and businesses alike as they will be disproportionately effecting the working class, self-employed and small businesses more so than other groups. Never mind the fact that such a raise goes directly against the Tories manifesto commitment from 2019 which stated it would not raise national insurance or income tax to further fund health and social care.
How is Your Business Affected?
For medium to big businesses these changes are somewhat manageable, although introduced at a time when businesses are still recovering from Covid-19 instability. The real issues will come to those with small businesses or those who are self-employed as their resources are already stretched thin. The government has stated that most small businesses will be safe from most of these changes due to tax relief, with 40 percent of businesses having to pay no extra and that 70% of the levy will be coming only from the biggest 1% of employers.
However, even with such measures small businesses are set to suffer as costs such as employing people will become more expensive and for the self-employed having to pay taxes on their own salaries will have them face loss of earnings. The government has received extensive criticism from various businesses and important figures who believe such a change will be detrimental for businesses.
How Can You Prepare for a Change?
After the terrible impact of Covid-19 on businesses these past few years, this will have a detrimental effect on how businesses operate in the future. Careful spending and budgeting will have to come more into play in the next few years as government help wanes in the future.
More so than ever it is important to realise what direction you want your business to go in and what steps you will need to undertake to get there. It is essential now to look at where you need to save and where to spend in order to build your brand and entice/retain customers.
You will need a clear understanding of what services your business needs and this could include;
Business and marketing planning
Market / audience/ brand research
Consumer journey mapping
Communication and content planning
Digital strategy development
Campaign development
One to one marketing training/workshops
Project support
All of which comes under the umbrella of 2Bees Marketing and Consultancy, we only ever recommend services which are vital to your business.
The contribution to health and social services, though a contested issue, is absolutely essential to the survival of the NHS. Businesses will be affected by these changes regardless of their size but by taking relevant action now, you can help cushion the fallout in the future.
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Sources:
Gov.uk
Startups.co.uk
Thetimes.co.uk
Theguardian.co.uk
BBC.co.uk
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