Independent retailers have welcomed a government pledge to guarantee that people working 30 hours a week on the National Minimum Wage will pay no income tax.
The pledge to link the minimum wage to the tax threshold was announced in the recent Queen’s Speech, alongside a ‘tax lock’ to rule out rises in VAT, income tax or National Insurance in the next five years.
Saki Ghafoor, who runs two Nisa stores in Northumberland and Tyne & Wear, said the move would make it easier to retain staff on longer hours. “At the moment tax comes in at between 16 and 20 hours. It works both ways - employers get extra hours and there will be more commitment from employees,” he added.
Kay Patel, who employs 25 staff at his four Bestway-supplied stores in East London, said: “This may help as there’s more incentive for my staff to work longer hours. At the moment, they don’t want to because it’s not worth it for them. I’ve already asked staff since the announcement was made whether they want to work more hours, and I’m expecting a positive response.”
Chris Ward of Eurospar Milford Haven, Pembrokeshire, said the proposed legislation was “the best news we’ve had for quite a while”.
“I’m a firm believer in the minimum wage, but the term is negative as well as being expensive for us. This gives us something positive to say - in effect it puts the minimum wage up. I’m pleased for low-paid workers, and it gives us peace of mind that our pay will go further.”
Association of Convenience Stores chief executive James Lowman added: “Our research shows that 67% of staff in convenience stores work 30 hours a week or less, so this pledge shows clear support for those workers.
“Additionally, the pledge means that any increases will be reflected in the lower earnings limit, so there will be consequences for the public purse as well as for retailers.”
”A lot of people try to limit themselves on hours as they don’t want to pay tax. Going forward this will benefit me as I will be able to hire people on longer hours.”
David Peacock, Mercer Premier Romsey, Hampshire
“Our staff are on fixed contracts, with supervisors on 30+ hours and sales staff on 16 hours, so it won’t affect us. But in general it’s a positive move, it’ll get more people out of benefits and into work.”
Sanjeev Vadhera, North East Convenience Stores