Britain Loses 277,000 Payroll Jobs as Self-Employment Rises 178,000 After Tax Hikes
Updated
Updated · IndexBox, Inc. · Jun 6
Britain Loses 277,000 Payroll Jobs as Self-Employment Rises 178,000 After Tax Hikes
3 articles · Updated · IndexBox, Inc. · Jun 6
Summary
277,000 fewer people were on British payrolls after Rachel Reeves' October 2024 Budget, while self-employment increased by 178,000, tax data cited in the report showed.
Tax changes are pushing workers out of formal employment: self-employed staff can often avoid the 20% VAT hit above the £90,000 threshold and sidestep costs tied to last year's £25 billion employer National Insurance rise.
Hairdressing salons illustrate the shift, with owner Toby Dicker saying six employees left over the past year to rent chairs elsewhere because the tax savings created a pay boost he could not match.
Wholesale, retail and hospitality have seen especially sharp payroll declines, and employers say tighter rules under the Employment Rights Act could further discourage hiring of low-paid, part-time and seasonal staff.
The trend points to a broader risk for labour-intensive sectors: businesses may cap growth, rely more on flexible self-employed arrangements and cut traditional jobs as employing staff becomes more expensive.