NEWS

Smallest firms hit by higher pension costs

Published:
22
May 2018

Startups and the smallest businesses are having to absorb higher pension costs as the new tax year gets under way. 

The Federation of Small Businesses (FSB) warns that the doubling of minimum employer contributions into workplace pensions from 6 April 2018 will “hit the very smallest firms and startups the hardest”. 

Firms in labour-intensive industries – such as retail, childcare and construction – will reportedly feel the impact most acutely. 

The FSB claims these sectors are already beset by high inflation and skills shortages, with further auto-enrolment increases due to come into force next year.

From 6 April 2019, employer contributions will rise to 3% and the total amount going into workplace pensions is expected to pass £17 billion around the same time.

However, the FSB welcomed the decision by chancellor Philip Hammond to freeze the VAT registration threshold at £85,000 for 2018/19.

Mike Cherry, chairman of the FSB, said: 

“VAT is the most time-consuming tax for our members to manage, with registered small firms spending a working week every year complying with VAT obligations on average.

“There is an issue with firms approaching the £85,000 threshold and putting the brakes on. 

“Resolving that lies in a smoothing mechanism though, not in suddenly dragging more firms into the VAT regime.” 

Contact us to discuss managing your costs
Business news
Finsbury Robinson

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Suspendisse varius enim in eros elementum tristique. Duis cursus, mi quis viverra ornare.

Contact Us

Sign up to our
Monthly Business Newsletter

Sign up to receive our monthly Business Newsletter that will keep you up to date with everything going on in accounting, tax, and finance. 

Finsbury Robinson Services

Sign up to our Monthly Business Newsletter

Find News Articles by Category

© Finsbury Robinson Ltd 2019

Registered Company No.  04749693

News HomeAuto Enrolment
Smallest firms hit by higher pension costs
Show/Hide
To get in touch use our Quick Contact Bar:

Monday                 8:30AM – 5:30PM
Tuesday                8:30AM – 5:30PM
Wednesday          8:30AM – 5:30PM
Thursday              8:30AM – 5:30PM
Friday                 9:00AM – 12:30PM
Saturday                                 Closed
Sunday                                   Closed

Finsbury Robinson
237 Westcombe Hill
Blackheath
London
SE3 7DW