'SHELLSHOCKED'
Moment distraught boss breaks down in tears & says ‘we’re totally done’ after £25bn NI tax raid in Budget
Watch the emotional interview below
THIS IS the moment a distraught boss breaks down in tears and says "we're totally done" after yesterday's £25billion Budget tax raid.
Founder of the Salon Employers Association Toby Dicker admitted he's "shell shocked" since Chancellor Rachel Reeves announced employers' National Insurance was set to rise by 1.2%.
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Mr Dicker told Sky News today: "The initial reaction from our supporters is shell shock, to be honest.
"It is much much much worse than we ever thought it could be."
He said he predicted a "worst case scenario" of £75,000 for his business but will cost him £127,000.
He said the Employers' NIC impacts the hairdressing and beauty industry "five times more" than traditional retail due to higher average wage costs.
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"We have a 60 percent wage cost," he explained.
"If we have 60 percent wage costs and someone else has 12 percent for the same given turnover, that's five times as much.
"So eighty-six grand for me and 17 for another retail business and so on... I'm just flabbergasted," he said, holding back tears.
Mr Dicker said 200 people from his industry had written a 17-page paper and taken it to the Government ahead of Labour's first Budget announcement since winning the election in July.
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He added they have also been speaking to the HMRC and the Department for Business and Trade for five years.
"They've promised us things that they haven't delivered on," he said.
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Mr Dicker said it's forced hair and beauty bosses into the gig economy.
This is a labour market where people work as freelancers or in temporary or contract positions, rather than in traditional employment.
"The gig economy didn't get touched by this Budget," Mr Dicker continued.
"You can be a delivery company and be turning over one and a half billion pounds, making a hundred and 20 billion pounds in profit, and from my calculations... you don't pay a penny."
What is National Insurance?
NATIONAL Insurance is a tax on your earnings, or profits if you're self-employed.
These contributions make you eligible for things like the state pension and certain benefits.
You'll usually pay National Insurance Contributions (NICs) when you're over the age of 16 and earning a certain amount.
For example, if you earn £1,000 a week, you pay nothing on the first £242.
Earn over that and you pay 10% on the next £725 - so £72.50. Then you pay 2%o on the rest, so £33, which works out as 66p.
For the self-employed rates are slightly different.
You can also get something known as National Insurance in some circumstances when you're not working, for example when you have kids and claim certain benefits.
NICs are usually taken automatically by your employer and paid to HMRC, so you don't need to do anything.
You can see how much NICs you pay on your wage slip.
Anyone working for themselves usually has to pay NICs themselves when completing a self-assessment tax return.
Tearing up, he said: "What the hell? I pay £86,000. Why? Just tell me why. And why are we five times harder hit because you haven't listened to us for successive administrations?
"We've tried to tell you and you haven't listened. I'm sorry, I'm angry and sad and shell-shocked, and our industry is totally done.
"They have no choice now. They're just going to say, we have to go into this gig economy, we have to get rid of all our apprentices. We can't afford it."
'A DIFFICULT CHOICE'
Ms Reeves told the Commons the national insurance contribution hike is “the right choice to make”.
She said: “We will increase the rate of employers’ national insurance by 1.2 percentage points, to 15%, from April 2025.
“And we will reduce the secondary threshold – the level at which employers start paying national insurance on each employee’s salary – from £9,100 per year to £5,000.
This will raise £25 billion per year by the end of the forecast period.
“I know that this is a difficult choice. I do not take this decision lightly,” she said.
The Chancellor added: “Successful businesses depend on successful schools. Healthy businesses depend on a healthy NHS.
"And a strong economy depends on strong public finances.
"If the party opposite chooses to oppose this choice, then they are choosing more austerity, more chaos and more instability. That is the choice our country faces too.”
WARNING
IFS think tank has today warned the move to increase the headline employer NICs rate and lower the threshold at which it's paid will hit the lowest paid jobs hardest, reports the .
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In a post-Budget briefing, economists said employers with large staff numbers on lower wages will be disproportionately affected.
Ms Reeves' plan also puts the burden on private industries by offsetting the impact with more funding for the public sector.
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