Increase in Living Wage Means Changes for SMEs
The government’s recent decision to begin increasing the living wage is both a challenge and an opportunity for SMEs.
Raising the living wage will mean SMEs have more costs, which may stunt company growth while the economy re-stabilises. However, hope is at hand – having more money in the pockets of consumers means increased spending to pay off personal debts. This can be hard to commit to though, as wages have declined relative to past years. Modifying the living wage could be a chance for the Bank of England to realign the economic landscape.
In advance of this year’s Autumn Budget, I anticipate and hope that we see some sort of assistance package for new small businesses who may not be used to this changing environment. Small businesses will need to work out exactly which employees are eligible, educate on what these changes mean and update the company’s payroll and policies. With these new changes rolling out incrementally until 2020, it’s important that you speak with your accountant about how your business will be impacted.