In October 2024, Chancellor of the Exchequer Rachel Reeves put forward the first Labour Budget in 14 years, announcing a raft of measures which would impact the retail sector and SMEs generally. Since then, they have been weighing up the financial impacts on their costs and what this will mean for their employees and their businesses.

Some of the key measures for employers were a 1.2 percentage point increase in employers’ National Insurance Contributions from 6^th April – taking the rate to 15%, while the threshold at which businesses will start paying will drop – from £9100 to £5000.

Additionally, the annual employment allowance, which currently reduces the employer’s NIC liability of eligible employers by up to £5000, will increase to £10,500 and the qualifying requirement to have a total secondary Class 1 NIC liability of less than £100,000 in the prior year will be removed.

Meanwhile, from 1^st April the National Living Wage for employees aged 21 and over will increase to £12.21 per hour, while the National Minimum Wage will also increase to £10 per hour for those aged 18 to 20 and up to £7.55 for those aged 16 to 17.

Noted as being the largest increases to rates on record, it is the retail sector which will be hardest hit. Retail has long been the sector taking on younger employers, with many at school and university often experiencing retail as their first foray into the world of employment.

In the wake of the Budget, retailers and the wider grocery industry have been coming to terms with the full reality of what this will mean for their business, many of which are SMEs in the region, as they assess the potential implications for them.

NR spoke to several businesses in the sector across Northern Ireland, giving them the opportunity to voice their concerns and outline clearly the impact on their businesses.

WE CAN’T RECRUIT NEW STAFF

Judy Mercer is owner of Hamilton News on Belfast’s Cregagh Road. Her and her husband, Bill have been in business for over 40 years and has witnessed some significant changes in the industry across those four decades.

She said they have had to put a refit to one of their businesses on hold because of the tax increases.

“Our initial reactions to Budget was that we, as independent retailers would have very serious decisions come April,” said Judy.

“There was nothing in the Budget to help the self employed.”

Judy added that they have worked out that the cost to their business will be in excess of £15,000 per annum.

“We will look to reducing our staffing costs by not recruiting and by reducing overtime and holiday cover,” she added.

“We had planned to refit one of our businesses this month, but this has been put on hold until we see how things pan out. There will be no recruitment of staff again until we see how things go.

“We have been having discussions with managers to look at cost savings and making the business more profitable to help with the impending rises have been in place since last year.

“We have also looked into new initiatives to help drive footfall for the future, ie. 10% pensioners discount on a Tuesday, with more to follow to attract new business in.”

READ THE FULL FEATURE IN THE APRIL ISSUE OF NEIGHBOURHOOD RETAILER HERE

The post Businesses battling budget bombshells first appeared on Neighbourhood Retailer.

Businesses are now being hit with a raft of new increases, as parts of Labour’s Autumn Budget come into effect on 1^st April, piling further financial pressure on retailers across the region.

With an increase in employers’ National Insurance Contributions, National Living Wage and Business Rates, businesses are being hit with a triple whammy of rises.

Noted as being the largest increase to rates on record, it is the retail sector set to be hardest hit – it has long been the sector employing young staff, with many at school and university often experiencing retail as their first foray into the world of employment.

From CTNs to larger convenience stores, wholesalers and suppliers, they have been coming to terms with the full reality of what this will mean for their business, assessing the potential implications for them and the impact on their staff and businesses in both the short and long term.

One store owner told Neighbourhood Retailer that the cost to their business will be in excess of £15,000 per annum, while another revealed they had already cut their opening hours in a bid to address the incoming rises and have put planned expansion on hold also.

In a special feature in the next issue of Neighbourhood Retailer, we hear from several businesses across Northern Ireland, who have voiced their concerns and outlined clearly the impact these rises will have on them, painting a stark picture for many businesses across Northern Ireland.

Keep an eye out for the April issue of NR coming soon.

The post Counting the cost of business as new rises come into effect first appeared on Neighbourhood Retailer.

The Finance Minister, Dr Caoimhe Archibald has written to the Chief Secretary of the Treasury pressing for funding and outlined the situation many Northern Ireland businesses are facing.

Highlighting that increased National Insurance contributions will prove incredibly challenging for local businesses, Dr Archibald added that the community and voluntary sector and public sector employers will also be negatively impacted.

“Devolved Governments quite simply do not have the financial capacity to compensate for decisions made on reserved taxation matters,” said the Minister.

“The Chancellor has said support will be provided for public sector employers, however it is unlikely to be sufficient to meet the increased costs. I have written to the Chief Secretary to the Treasury asking for our costs to be met in full and for support for those outside central government who provide vital public services, given the pressures they will face as a result of this policy decision.”

The Minister said that her department has commissioned Ulster University Economic Policy Centre to conduct a focused cost of doing business sectoral study to look at the impact of the National Insurance contributions increases and other factors such as insurance, energy and property costs and the disparities in tax regimes, such as VAT, across Ireland.

“It is important that we hear the voices of those impacted which is why the team will be carrying out a series of sectoral and business representative body consultations to inform the research,” she added.

Terms of Reference for the Cost of Doing Business research have been published on the Department of Finance’s website with the study due to be concluded by the end of March 2025.

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