‘This could be the end of my business’: Serious concerns following significant price hikes

Businesses have voiced serious concerns following Wednesday’s Budget – with one owner potentially facing closure.Higher employer National Insurance (NI) contributions, an increase to the minimum wage and doubled business rates were three of the main talking points when the Chancellor delivered her announcement on Wednesday.From April, companies will pay NI at 15% on salaries above £5,000, up from 13.8% on salaries above £9,100.

At the same time, the legal minimum wage for over-21s will rise from £11.44 to £12.21 per hour – while many owners will see their business rates nearly double.The announcements have sent shivers down the spine of some business owners in West Norfolk.Kelly Ranger, a small business owner in Lynn who runs a pop-up market at The Place on New Conduit Street, said that due to the NI increase, it will not be financially viable for her to continue employing anybody on a pay-as-you-earn basis.

“I’ll now have to only use sub contractors who are self employed already,” she said. “This makes it much more difficult to employ people as not many want to be self-employed long-term because of not having a pension plan and benefits.“This could be the end of my business which I started up in 2015. I’ve worked incredibly hard to build my business to the point it’s at today, but I need to face reality of long term sustainability.” Ms Ranger’s concerns are echoed by Daniel High, who runs the Rewind nightclub on Norfolk Street.

He has also been spooked by the impact rising costs following the Budget could have on the venue – and described the Chancellor’s move to take 1p off the price of a pint as “pointless”.“I understand minimum wage going up as long as it actually puts money in people’s pockets,” he said.“Business rates are the biggest issue for me. That is my biggest concern. “In the hospitality sector at the moment, that is not manageable.”Mr High could not rule out having to lay off some staff members as a result of the Budget, as he says he cannot simply increase prices in the nightclub to counteract higher costs.“We always work hard to make sure we don’t lay anyone off,” he said.Speaking on the impact the Budget could have on Lynn’s town centre, he added: “During the week I look around the town – the restaurants, bars and pubs aren’t busy. “They have to run all week to keep running, and it is going to be hard for them.”Vicky Etheridge, the manager of the Lynn Buisness Improvement District (BID), believes the Budget will affect different-sized companies in different ways.

This is particularly relevant in the town centre, which has businesses of varying sizes across a range of different sectors.She said: “There is a sense of cautiousness about how the Budget will play out in coming months and into next year as those NI contribution changes and higher minimum wage kick in – will this result in higher prices for consumers?“On the plus side, we’re pleased to see the commitment to reforming business rates which we hope will benefit all town centre businesses, no matter the size. “We’re also pleased to see a commitment to the Long Term Plan for Towns and UK Shared Prosperity Funding and wait to hear further details on both those programmes.”Accountants at Lynn-based Stephenson Smart have run some comparisons following the rise in NI contributions from employers.They suggest that a business with around five employees will be no worse off than previously.Claire Melton, a partner at the firm says that “given the increase in the employment allowance, this emphasises the importance of claiming the employment allowance when processing your payroll”. She added: “Also the employment allowance is now available to all employers without an upper threshold so if you were not previously able to claim you may now be able to.“We expected an increase in rates of capital gains tax, which we have seen, but this has not affected residential property, which is a relief for investors.“However the increase in SDLT surcharge on the purchase of additional residential properties from 3% to 5% will make investing in rental property less attractive.”Nova Fairbank, the chief executive of the Norfolk Chambers of Commerce, said: “I think everyone would agree that more investment is needed in our public services such as the NHS and our schools and also the need to invest in order to deliver growth is a must. “However, yesterday’s Budget will put pressure on many businesses. The Chancellor has looked to ease the pain by holding out a promise of better days ahead, but we need to know a lot more detail as to what that looks like.“While some protection for smaller firms is welcome, the increase in employer National Insurance contributions will place a further cost burden on business.“This, coupled with a 6.7% increase in the National Living Wage, and the reduction on the employers secondary threshold from £9,000 to £5,000, means many firms will find it more challenging to invest and recruit in the short-term.“This is likely to result in a large number of businesses looking at the increased employer costs and seeing no option but to consider increasing their own prices to their customers.” Ms Fairbank added: “On the more positive side, the announcement that business rates for 2026/2027 will have two lower tax rate bands for retail, hospitality and leisure will be welcomed by businesses in these sectors.“As a region, businesses will be looking carefully at how to capitalise on the Government’s proposed investment plans for sectors such as life sciences, creative and engineering. We also welcome Ms Reeves’ announcement on the investment in broadband for rural areas.“Norfolk businesses and residents alike are aware of the pothole challenges in this region, so further investment for roads maintenance will be welcomed by all, but it was disappointing to not hear of any further infrastructure investments in the East, apart from East/West rail for Cambridge.“To help the sustainability agenda and to progress economic growth, the Eastern region really need to see the Ely/Haughley rail junctions be delivered as soon as possible.” “Much now rests on the Government’s next steps, with the future benefits outlined by the Chancellor by no means guaranteed. A lot will be riding on the success of the industrial and trade strategies, and the effectiveness of devolution and public investment in infrastructure to reinvigorate regional supply chains.“To build business confidence, it’s crucial that we now see decisive and inclusive action at pace from the Government to unlock the investment the economy sorely needs.”