SMEs prepare for pay rise

The UK’s SMEs were both well prepared and in favour of April’s national minimum pay rise; however, this has come at a cost as 50% say it will see a fall in its profits, research from Close Brothers Asset Finance reveals.

The National Minimum Wage (NMW) is the minimum wage per hour a worker is entitled to in the United Kingdom. These rates are reviewed yearly by the government and from April 2018 all workers aged 25 and over have been legally entitled to at least £7.83 per hour.

‘With the review happening annually, the rise should come as no surprise,’ said Neil Davies, CEO, Close Brothers Asset Finance. ‘For many fore warned is fore armed with the additional costs being factored into their forecasts. That said, the profitability for 50% of businesses will be adversely affected with our research clearly demonstrating the ‘pain’ being felt most by firms employing between 11 and 250 people.‘