Adults who are paid the minimum wage will benefit from an increase of 15 pence, taking the hourly rate to £6.08. The Low Pay Commission recommended the increase, which the coalition government will implement from 1st October 2011. The minimum wage will also increase for 16 and 17 year olds, 18 to 20 year olds and apprentices.

The director general at the British Chamber of Commerce, David Frost, has warned that the increase may be at the wrong time for the unemployed and businesses who are struggling. In his opinion, it was a priority to get the jobless back into work. It is also an extra burden for many businesses who are having to introduce wage freezes during 2011. The minimum wage increases could block creation of new jobs, affecting recovery of the economy.

A small business accountants will already be implementing the changes into the business recovery plan, ensuring that resources are maximised. Planning is essential to create new business, new jobs and economic growth, implementing all legislative changes in a timely manner with minimum disruption.

The deputy director general at the Confederation of British Industry, Neil Bentley agreed with the increase saying:

“This moderate increase strikes the right balance during a period of economic uncertainty. It means that workers on the minimum wage will not fall behind the rest of the workforce in terms of pay rises.”

The TUC are also in agreement with the boost in wages for the 840,000 low paid workers, especially as the new rate still allows for creation of new jobs. Small businesses are advised to consult with their accountant firm to implement the new changes.

Want to learn more?

Subscribe to our newsletter to get accounting tips like this right to your inbox