The British Independent Retailers Association has said it is optimistic about the spring budget where the Chancellor announced the reduction of National Insurance rates.
Bira, who work with over 6,000 independent businesses of all sizes across the UK, said the news from Jeremy Hunt that NI rates would be reduced could offer a ‘glimmer of hope’ for struggling retailers who are desperate for consumer confidence to return to the high street.
The Chancellor has announced a significant cut in the main rate of class 1 National Insurance, reducing it to 8% from 6th April 2024. This follows a prior cut from 12% to 10% in January. Additionally, the class 4 self-employed NICs rate will be reduced from 9% to 6%, along with the abolition of class 2 self-employed NICs.
The Treasury estimates substantial savings for individuals, with an average worker on £35,400 saving more than £900 annually. The average teacher on £44,300 is expected to gain £1,250 per year. For example, those earning £20,000 will benefit from a £148.60 yearly saving, while those earning £50,000 will save £748.60. The average self-employed individual earning £28,000 is anticipated to save about £650 annually as a result of the NI rate cuts.
Andrew Goodacre, CEO of Bira, said:
We welcome the Chancellor’s decision to reduce National Insurance rates, providing consumers with additional disposable income. We hope that this financial relief will boost consumer confidence, enabling them to spend more on the high streets.
However, while we acknowledge the positive impact of the NI rate cuts on consumer spending, there is a missed opportunity in not addressing the planned 7% increase in business rates, which remains a concern for the retail sector.
We remain cautious about long-term economic growth, and there is the need for initiatives that drive employment and production. The association believes that sustained economic growth is crucial for the growth of businesses, and more measures are needed to support this aspect.”
