Today's Edition
London (PA Media/dpa)
UK businesses are set to face a multibillion-pound wave of higher costs this week as higher wages and tax increases come into force.
Retail and hospitality bosses have warned that higher labour costs and taxes are set to push up prices for customers across the UK.
A raft of measures linked to the Labour government's first budget will come into force on Tuesday, April 1, including a rise in the national minimum wage and higher property tax payments.
This will be followed by changes to national insurance contribution (NICs) payments from April 6.
Millions of UK workers will benefit from a rise in the national minimum wage to 12.21 pounds ($15.8) an hour on Tuesday, representing an increase of 77p.
The move has forced many of the UK's largest employers to increase their rates of pay, with supermarket groups Tesco and Sainsbury's among firms to announce they would hike their basic pay above the new minimum.
The rise in wages will come into force at the same time as businesses swallow a raft of tax changes, many of which they had not expected prior to the autumn budget.
One of the most significant of these will be an increase in business rates for many high street firms due to a reduction in current discounts for more than 250,000 retail, hospitality and leisure firms.
These businesses currently receive a 60% discount on their business rates - the property tax on commercial businesses - bills up to a cap of 110,000 pounds.
However, this discount will be reduced to 25% from April 1. The drop in the discount means that the average small shop will now see its business rates spiral from 3,589 pounds to 8,613 pounds, according to analysis from global tax firm Ryan.
Its research also showed that the overall business rates bill for firms in England will rise by 1.5 billion pounds for the year as a result of the change.
Pub, retail and leisure bosses have called for an overhaul of the business rates regime in the government's next budget.
From Tuesday, supermarkets, food producers and online retailers will also be hit by a new plastic packaging tax.
Retailers will be liable to pay a charge, based on weight, for every item of packaging they use in the products that they sell.
The Food and Drink Federation has warned that the tax, which could raise up to 2 billion pounds, is likely to lead to higher prices for consumers.
Businesses will face further pressure from higher taxes from April 6, when changes to NICs come into force.
In October, Finance Minister Rachel Reeves announced that the rate of employer NICs will increase from 13.8% to 15% in April. At the same time, firms will also pay more because the government lowered the threshold at which companies would start paying NICs from 9,100 to 5,000 pounds.
Changes to NICs are expected to allow the government to raise a further 25 billion pounds each year.
