Labour accused of taxing youth jobs out of existence as £780-a-year ‘jobs tax’ hits high street with 122k shop jobs lost

THE Government has been accused of “taxing youth jobs out of existence” after new figures revealed the annual cost of hiring an entry-level part-time worker has soared by almost £780. High street chiefs warn that hikes in National Insurance and the National Living Wage have already forced retailers to axe 122,000 jobs in just two years. The warning comes as a new British Retail Consortium report reveals that the tax burden of employing entry-level staff has skyrocketed. For a part-time employee working just 16 hours a week on the minimum wage, the employer’s National Insurance bill has surged from a mere £58 in 2024 to a massive £837 this year. Sign up for the Money newsletter Thank you! This 14-fold increase means shops are now paying almost £800 extra in tax just to give a young person a part-time shift. Combined with the minimum wage increases, retailers have been slapped with £6.5billion in extra employment costs, forcing them to slash staff numbers just to survive. Young people are bearing the brunt, despite the high street traditionally providing a vital first step into work for school leavers. Almost one in four workers starts their career in retail, using flexible, local roles to gain essential skills and climb the career ladder. Yet nearly one million young Brits are now neither earning nor learning. Office for National Statistics figures show 981,000 people aged 16 to 24 were not in education, employment or training (NEET) between April and June. Most read in Money Business leaders are urging Chancellor John Healey to use next month’s Budget to raise the threshold at which firms start paying employer National Insurance. Businesses currently pay National Insurance on every pound an employee earns above £5,000 a year – down from £9,100 after Rachel Reeves’s first Budget in October 2024. The BRC wants the threshold raised to £6,000, meaning shops would pay no National Insurance on the first £6,000 of a worker’s salary. It says the move would cut hiring costs and make it easier for retailers to offer young people part-time jobs. Helen Dickinson, Chief Executive of the British Retail Consortium said: “Government cannot tackle the youth employment crisis while making it dramatically more expensive to hire young people, effectively taxing youth jobs out of existence. “In just two years, the employer National Insurance bill for a typical part-time entry-level worker has risen fourteen-fold and retail has lost 122,000 jobs. “These are the flexible, local roles that have long given young people their first foot on the career ladder. “Retailers can play a vital part in solving the youth employment crisis and are stepping up with Opening Shift, the new retail work experience programme for the young. “But for more of these placements to turn into job opportunities the cost of employing a young person must fall. Increasing the employer NICs threshold to £6,000 is the best way to achieve that and should be the first priority in the Budget next month.” Last week, major retailers teamed up with the Department for Work and Pensions to launch the Opening Shift programme. The emergency scheme aims to deliver 11,000 work experience placements to help teenagers break out of a doom loop where they cannot get a job without experience, but cannot get experience without a job. Comment now