Local business leaders have warned that increased National Insurance contributions and minimum wage hikes could put pressure on Ipswich employers, following today's Budget announcement.
The big picture: Chancellor Rachel Reeves has delivered Labour's first Budget since 2010, introducing significant changes that will affect how Ipswich businesses operate from April.
Why it matters: Local firms will see their National Insurance contributions rise, while also facing increased minimum wage costs.
Businesses will pay National Insurance on workers' earnings above £5,000 from April, down from £9,100 currently.
The rate will increase from 13.8% to 15%, raising an estimated £25bn a year nationally.
The minimum wage for over-21s will rise from £11.44 to £12.21 per hour.
"As a business owner, there are real concerns that the Government is unaware of the cumulative effect of minimum wage increases and the very steep NI increases," says Colin Low, managing director of Ipswich-based financial planners, Kingsfleet.
On changes to Business Relief limits: The Budget also introduces changes affecting family businesses planning for succession. Changes to Business Relief limits will mean family businesses passing to the next generation face a 20% tax after the first million.
Low describes this as "a significant additional expense for grieving families to have to find" while acknowledging that the changes "may sound quite reasonable" to many.
Yes, but: Some support for businesses was announced:
The employment allowance will increase from £5,000 to £10,500, helping firms reduce their NI liability.
Corporation tax will remain at 25% until the next election for businesses with profits over £250,000.
The bottom line: While the Budget introduces measures to support some businesses, firms face increased costs through higher National Insurance contributions and wage bills.
