A new employment allowance announced in last week’s Budget will encourage store owners to promote more part-time staff to full-time positions, retailers have told C-Store.
From April 2014, the government will introduce an allowance of £2,000 per year for all businesses to be offset against their employer National Insurance contributions.
“It will mean that 450,000 small businesses - one-third of all employers in the country - will pay no jobs tax at all,” Chancellor George Osborne said. “For the person who’s set up their own business and is thinking about taking on their first employee, a huge barrier will be removed.”
Nigel Dowdney, who owns two stores in Norfolk, said he doubted whether it would encourage established businesses to hire more staff. However, it would help retailers increase the hours for their existing staff, he added.
“Most people in our industry hire part-time staff to avoid National Insurance,” he said. “But this will encourage me to take on another full-time supervisor by promoting someone in a part-time position.”
Chris Pollard, of Barlby Village Stores in Selby, North Yorkshire, said it was now a possibility to take on more full-time staff. “But it works both ways, as I have more staff now doing fewer hours, but it means I have more cover.”
In the Budget, Osborne also cut corporation tax to 20% from April 2015, but took no action to reduce business rates and VAT.
However, he secured a commitment from the payment card industry to reduce the time it takes for card payments to reach a shop’s bank account by using the Faster Payments System to process payments.
Association of Convenience Stores chief executive James Lowman commented: “This will make a significant difference to retailers’ cash flow, keeping more stores open and able to invest in their business and their community.”