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Prime Minister Boris Johnson's tax hike to fund health care could push at least 50,000 people into unemployment in the U.K., according to analysis from the Federation of Small Businesses.
The 1.25% increase in National Insurance Contributions, which are paid by workers and firms, will cost small businesses 5.7 billion pounds ($7.8 billion) a year, the research showed.
The tax blow comes as employers weigh whether to bring back furloughed workers once government wage subsidies end later this month. That could mean even more people become unemployed, according to the FSB, a business lobby.
The hike “could mean 50,000 more people out of work after it takes effect in April -- that means 50,000 livelihoods harmed, 50,000 people who would otherwise be at work in our economy,” said FSB National Chair Mike Cherry.
“The rise acts as a brake on employment, another reason in the ‘no' column for employers considering expansion, and another reason in the ‘yes' column if they're thinking about cutting staff numbers,” he said.
Read More:
- U.K. Blinks First on Covid Deficits With Tax at 70-Year High
- Johnson's Tax Hike May Cement U.K. Generational Inequality
- Johnson Looks to Head Off Rebellion Over $17 Billion Tax Hike
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