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Minimum wage hike poses challenges for UK farming sector

The recent Autumn Statement, as announced by the Chancellor of the Exchequer, Jeremy Hunt, has raised concerns within the agricultural sector, particularly regarding the impact of the increased minimum wage on farm labour.

Land and estate agency GSC Grays highlighted the potential repercussions of the rise in the National Living Wage to £11.44 per hour from April 1, 2024, which for the first time includes workers aged 21 and 22. Additionally, there will be a significant hike in the National Minimum Wage rates for younger workers and apprentices.

The farming industry, already under considerable financial strain, fears that these changes will exacerbate existing challenges. Robert Sullivan, Head of farm business at GSC Grays, expressed concern that the higher minimum wage could render other industries more appealing for potential workers, forcing farmers to further increase wages.

He also noted the scarcity of farm labour and the looming issue of replacing retiring farmers and workers.

In addition to wage changes, the Autumn Statement included tax alterations. The weekly Class 2 National Insurance Contributions (NICs), a charge paid by self-employed individuals earning over £12,570, will be abolished from April 2024.

There will also be a reduction in the rate of Class 4 NICs on earnings between £12,570 and £50,270, dropping from 9% to 8%. These cuts are expected to benefit around two million self-employed individuals, with an average tax saving of £350 per year.

Furthermore, the government announced a £4.3 billion business rates support package spread over five years, intended to protect small businesses, described as the "backbones of communities".

This package includes maintaining 75% retail, hospitality, and leisure relief for 230,000 properties and freezing the small business multiplier for the fourth consecutive year.

The announcement may also affect farmers who have diversified their business operations


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