The British Independent Retail Association (BIRA) has warned the tax increase will “further burden” independent stores before they have even recovered from the financial loss of lockdown.
The association said that the 1.25 per cent increase of National Insurance (NI) announced by the UK government is set to hit independent retailers “the hardest.”
The “disappointing” decision will unfairly impact small businesses and lower paid workers, according to BIRA.
It also said that the added burden of the increase in minimum wage will compound the financial distress of independent retailers.
The raise in NI has been scheduled to alleviate NHS backlog and help fund £36 billion over three years for the service the government announced.
However, the association said that although it supports the NHS, small businesses cannot afford the tax increase due to loss of business during the pandemic.
“Despite all the positive economic data, this recovery is still very fragile and independent retailers will need all their reliance and determination to withstand these increases, managing increased levels of debt, rising prices and the supply chain problems,” BIRA chief executive Andrew Goodacre said.
“We need more support, not more burden.”