Let’s face it—government budgets can feel like a maze of numbers and policies that make your head spin. For busy florists juggling bouquets and bookkeeping, it’s easy to miss the changes that really matter for your business. But don’t worry—we’ve got you covered. Here’s a simple breakdown our Bramble of what the latest budget update & what florists need to know mean for your flower shop, including updates on wages, employee National Insurance Contributions (NICs), and new small business support.
For the full picture, take a look at the government announcements here
Budget Updates: What Florists Need to Know
National Minimum Wage Increases
From 1 April 2025, the National Living Wage (for workers aged 21 and over) will rise to £12.21 per hour, while the National Minimum Wage for workers aged 18-20 will increase to £10 per hour. This marks a 6.7% increase, following a similarly significant rise last year.
If your recruitment strategy involves paying slightly above the NMW to attract employees, you may want to rethink your approach. With the steady rise of minimum wages, non-monetary incentives—like flexible hours, training opportunities, or a supportive work environment—can become a more effective way to stand out to potential employees.
Changes to National Insurance Contributions (NICs)
Starting in April 2025, employers will face higher NIC costs due to:
- Increased NICs Rate: The rate for employers’ contributions will rise by 1.2 percentage points to 15%.
- Lower Secondary NI Threshold: The threshold at which employers start paying NICs will decrease from £9,100 to £5,000. This means you’ll need to pay NICs for employees who work fewer hours or earn less.
These changes will impact many florists, especially those who rely on part-time or seasonal staff to handle busy periods.
Increased Support for Small Businesses
To help small businesses manage these additional costs, the government is doubling the Employment Allowance from £5,000 to £10,500 per year starting in April 2025. Additionally, the previous £100,000 NICs bill cap for eligibility has been removed, making this support available to all eligible employers.
Key Benefits of the New Employment Allowance
- Zero NICs for Many Employers: Over 865,000 small businesses, including florists, are expected to pay no NICs at all in 2025.
- Financial Breathing Room: The increased allowance will offset the cost of higher wages and NICs, reducing the financial strain on employers.
- Simplified Eligibility: By removing the £100,000 cap, more small businesses can access this vital support.
How This Affects Your Floristry Business
These changes are a double-edged sword for florists. On the one hand, increased NMW and NICs mean higher costs, particularly for businesses that rely on part-time staff or operate on tight margins. However, the enhanced Employment Allowance offers a significant opportunity to manage these expenses.
What You Can Do
- Review Payroll Costs: Evaluate how the NMW and NICs changes will affect your bottom line. Adjust staffing levels or budgets if needed.
- Claim Employment Allowance: Check your eligibility for the updated allowance and ensure your payroll system is set up to claim it. This could save you up to £10,500 per year.
- Focus on Non-Monetary Incentives: With rising wages, offering benefits like training, flexible schedules (where possible – we know this can be hard in a florist shop!), or a positive workplace culture can help attract and retain employees without breaking the bank.
Next Steps
To prepare for these changes:
- Speak to your accountant or payroll provider about the impact on your business.
- Find out if you’re eligible for the Employment Allowance and how to claim it.
While the cost of doing business is increasing, these updates to the Employment Allowance offer a lifeline to florists and other small businesses. By staying informed and proactive, you can keep your business thriving in this changing financial landscape.