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The big increase in National Living Wage is a stealth tax

Gareth Morgan
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Managing director - Ferret, Cardiff

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I’ve been looking at some of the numbers around this and they’re, unsurprisingly, somewhat different to the official line.

The government is trumpeting an increase of £930 a year for 35 hours a week work at NLW rates. That becomes £631 after tax and NI on current rates. Only worth £233 if you’re getting Universal Credit though as it reduces the benefit. There’s a further hit on Council Tax Rebate as well.

If you want the details, my blog post below points out the higher NLW from April looks much more like an up-to 88% stealth tax on employers than an effective way to make low paid workers better off?.

https://benefitsinthefuture.com/

metahome
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Citizen's Advice Reading

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Will this increase also drag more people into the clutches of the benefit cap as they will now need more income to match 16 x NLW per week of income?

[ Edited: 2 Jan 2020 at 06:10 pm by metahome ]
Elliot Kent
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And I see that you’re being quoted on a similar point re the Greggs bonuses Gareth -
https://www.theguardian.com/society/2020/jan/13/bonus-blow-for-greggs-staff-prompts-call-for-benefit-and-tax-rethink

Gareth Morgan
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Managing director - Ferret, Cardiff

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Total Posts: 1618

Joined: 16 June 2010

Yes, pretty much exactly the same point, except for the impact of paying it in a single month.  I just did some simple calculations in https://benefitsinthefuture.com/greggs-300-bonus-or-booby-prize/ .  Odd that Greggs has got much more traction than NLW despite affecting far fewer people and having a much smaller impact.  More human interest, I suppose, and easier to grasp.