The letter from industry bosses suggests that changes in the NICs threshold are “regressive in their impact on lower earners and will impact flexible working practices which many older workers and parents rely upon”.
The signatories are calling for the government to consider one of two measures to “protect businesses who employ low earners” to mitigate the impact.
Suggested measures are a new employer NICs band which would apply between £5,000 and £9,100 at a lower rate of 5%, or implementing an exemption for taxpayers working fewer than 20 hours per week.
The Office for Budget Responsibility (OBR) has calculated that three quarters of the impact of the NI changes will be felt by employees as bosses hold back on pay rises and hiring in the face of higher wage bills.
During a select committee hearing on Tuesday, the OBR’s Prof David Miles said it was “very plausible” this would disproportionately affect lower-paid workers.
The changes set out in the Budget are, however, predicted to raise some £25bn a year, making it one of the biggest single tax-raising measures in history.
The chancellor has previously said that she was not immune to “criticism” over the move, but has argued that it will put public finances on a “firm footing”.
The hospitality industry’s letter follows on from big British supermarkets such as M&S and Sainsbury’s hinting that they may put up prices in a bid to offset higher wage bills.
Sainsbury’s chief executive Simon Roberts said on Thursday that the NI changes would cost the business around £140m – a sum which does not include the increases to minimum wage.
The boss of Wetherspoons also said earlier this week that following the Budget, taxes and business costs were “expected to increase by approximately £60m”.
Its chairman said that he believed many food and drink businesses planned to pass costs on to customers.
Amid criticism from the hospitality sector, Rachel Reeves is expected to unveil pension reforms this week which are intended to channel money into private businesses and infrastructure.
At her first Mansion House speech in the City of London, Ms Reeves will pitch “growth brought by unlocking private sector investment, including in our financial services industry, and growth brought about by reform – both of our economy and of our public services”.
