Nearly half of manufacturers (49%) have concerns about their business surviving in the next five years thanks to the impact of increases in the minimum wage and employers’ National Insurance Contributions. A new report of 114 business leaders by Telford-based personalised workwear specialist
MyWorkwear has revealed that UK companies are looking at a bleak landscape in the wake of the Government’s latest tax changes. 77% of bosses are actively concerned about the rise in costs, with 75% predicting that they will have to pass these onto their customers – potentially leading to higher consumer prices and a hike in inflation.
James Worthington, co-managing director at MyWorkwear, said: “The findings of our report should send a chilling message to the Chancellor on how industry is going to react to the April tax changes.
“The economic growth she is crying out for is set to be strangled, with firms more interested in investing in automation over people and, tellingly, ‘recruitment’ set to be halted by more than half of the manufacturing companies questioned.”
He continued: “As a workwear supplier we tend to be a pretty good barometer for economic sentiment, working with tens of thousands of companies across a range of industries including manufacturing and engineering, hospitality, agriculture and construction. The anecdotal feedback we were hearing on the ground has been reflected in the results of this report.”
Inflation a key concernIn addition to the planned tax changes, the report also posed questions about other challenges facing businesses heading into the 2025 financial year. A staggering 47% of manufacturers named inflation as the biggest factor impacting their business struggles, closely followed by rising utility costs (30%). Lack of skilled labour was third on the list (21%), with just one in 10 respondents stating reduced Government support is holding them back.
Mr Worthington added: “As a small business, the upcoming increase in employer National Insurance Contributions and minimum wage will have a huge impact. We are expecting to incur additional costs of around £100,000 as a result of these changes and are currently looking at new commercial activities and pricing structures to ensure we can absorb these costs without passing the hikes on to our customers - except for our annual increase.”
Workwear supply is also set to be affected by the tax hikes according to manufacturing bosses. 56% stated that their requirements will be impacted by cost-cutting measures, whilst 12% said they were removing all non-PPE workwear for staff. On a positive note for employees, only 7% of manufacturers surveyed have considered reducing the quality of their workwear.
For further information or to access the full survey, please visit the website
here.