Brits resort to ‘job-hugging’ as tax hikes bite
Workers are now resorting to ‘job-hugging’ after last year’s Labour tax raid had a chilling impact on the UK jobs market.
The £40bn cash grab, unveiled by Rachel Reeves in last year’s Autumn Budget, has triggered a significant slowdown in hiring and has resulted in substantial job losses nationwide.
As a result of these changes, more than half of British workers said they were prioritising holding onto their roles over ambitions due to the poorer state of the jobs market, according to a report from Employment Hero.
Nina Skero, chief executive of the Centre for Economic Business Research, said: “Workers are facing a difficult balancing act – while pay growth remains strong, inflation continues to eat into real wages, and job opportunities are thinning out.”
The report pointed to the increase in national insurance contributions (NICs), which had a “ripple effect right across the economy”.
In April, when the tax hike took effect, employment growth contracted by 0.3 per cent.
Reeves raised employers’ NICs to 15 per cent from 13.8 per cent – a policy which business leaders across the country have lambasted.
“We’re now at a critical juncture,” Kevin Fitzgerald, UK managing director at Employment Hero, said.
“As we head towards the Autumn Budget, avoiding more tax changes that trigger knee-jerk reactions from businesses will be vital if we want to build on the early signs of recovery.”
Six in ten employees surveyed by Employment Hero said they believe the jobs market is getting worse, with just 12 per cent believing it’s improving.
Labour’s first budget under Rachel Reeves stings
Despite the employment headache, some policies from the Autumn Budget have provided a much-needed boost to British firms, with tax advisor EmpowerRD hailing the research and development tax credits.
Fresh research from EmpowerRD showed nearly 50 per cent of firms had been able to recruit and retain talent due to the tax relief and 44 per cent said it had allowed them to take on more ambitious projects.
But businesses are preparing for more pain in the November budget, when a whole host of taxes could be on the table with Rachel Reeves expected to need to raise at least £20bn from taxes in order to stay in line with her “non-negotiable” fiscal rules.