What's the new "Job Tax" all about?
Latest UK’s Labour Budget delivered a ‘tax on jobs', increasing Employers National Insurance by 1.2% plus £615 per employee. The ambition? To raise funds to invest in Britain. The effect? I anticipate, quite the opposite.
British businesses are under pressure
British businesses are under immense strain and have been for some while. But there is a way out. Offshoring is not to be feared. With a little support from an experienced partner, it’s easy to set up and the benefits can be realised quickly.
Why offshoring is more important now than ever
Offshoring. Why it’s more important now than ever before and how it can save your money…
Offshoring is the practice of moving roles, teams, or business functions from one region to another, usually for cost-efficiency reasons. Large corporations have enjoyed this practice for decades.
But for many small and medium-sized British businesses, it has been feared, avoided and largely unexplored. Other than offshoring, read about other ways to reduce cost in our blog- How to reduce business cost.
The perfect storm for UK businesses
Until now. A ‘perfect storm’ of recent events has opened the eyes of business owners and senior management to the challenges of local hiring policies and the immense benefits of a global workforce.
The shift to remote work
The COVID-19 pandemic initiated the widespread adoption of remote working practices. Expectations changed for both employees and employers. Technology supported hybrid, home-based, and ‘nomad’ working cultures. Employers quickly realised that employees are generally happier with greater flexibility in their work environment. Happier employees make more productive, committed employees. To paraphrase Richard Branson, a happy employee makes a happy customer.
Inflation is hitting everyone hard
Following on from the pandemic, a dramatic up-turn in inflation made everything more expensive. For the consumer, the cost of basic goods and services increased dramatically. Salaries do not stretch as far as they once did. The knock-on? For the employer, salary expectations are rising, particularly at the mid to senior levels where elasticity to cope with price increases is less. With the combination of efficient remote working practices, driven by the pandemic, and increased costs, through inflation, business owners were already feeling the squeeze.
The job tax pushes businesses to the edge
And then the Labour Budget and the increase in Employers National Insurance; a direct attack by the British Government on job creation. The hope? £40 billion in tax income. The reality? Well, entrepreneurs are natural problem solvers, motivated by wealth creation (in the most). They are not the ‘accepting’ kind. Raising taxes on business owners will accelerate the shift offshore, where the cost of talent can be up to 70% lower.
Think offshoring is complicated? Think again
If you’re thinking about hiring remotely but worried about finding and managing remote employees, don’t be. We will be the Employer of Record (EoR) for your remote team and will manage everything for you.
Let’s discuss your remote hiring needs
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