𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

Small businesses “feel stuck in limbo” and “squeezed on all sides” by Labour’s higher costs of employing people, an industry boss has warned. Almost half of firms (47%) said either higher National Insurance Contributions or the increased National Minimum and Living Wages are having the biggest tax impact on their business. The Middle East conflict is also having an impact, with one in five family firms pausing recruitment and one in six cutting jobs

Ministers must cut the cost of employment to boost job creation, Family Business UK said. Neil Davy, CEO of the organisation, said: “Family businesses have been building Britain for generations but, right now, they feel stuck in limbo being squeezed on all sides by the permanently higher costs of employing people, and temporary cost increases from ongoing geopolitical uncertainty.

“Family firms remain eager to grow employment, but cost and uncertainty are forcing them to make unpalatable choices—to cut back on recruitment more than they would like and, in some cases, reduce headcount.

“If we are to reverse this situation and allow businesses to create the opportunities workers need there must be a renewed focus on reducing the burden of National Insurance Contributions along with careful management of the National Minimum and Living Wages.”

Inheritance Tax continues to cause major challenges for most family businesses, according to the latest research into over 500 family businesses.

It comes amid a youth unemployment crisis with about 1 million people aged 16 to 24 not in education, employment or training.

More than two fifths (41%) said that government support with high costs of employment would be the best way to help them create new roles and recruit staff over the next year.

Meanwhile 35% want more stability and predictability in employment regulation.

Mr Davy said: “Family businesses are the lifeblood of local economies across the country and are critically important to thriving communities.

“With the Budget just five months away, the Government must look at the priorities highlighted in this study and create a fairer—and simpler—tax system that supports family businesses and unlocks their potential to deliver the increased opportunities and economic growth our country needs.”