Small businesses seem to be taking a lot of unnecessary hits of late, and they are already feeling the effects of this “injustice.”

It seems the government is not yet content with just hitting businesses with an endless list of legislation and then tying them up with red tape. Now it looks like small business employers will be forced to make contributions to a new National Pensions Savings Scheme or NPSS.

An employee can decide not to participate in the NPSS but with the sheer apathy of most employees it is believed that most will choose to remain in the scheme.

A white paper regarding the issue has already been given to the press and it indicates that employers will be forced to contribute an additional 3 per cent of an employee’s salary into the NPSS. The employee, in turn, will contribute 4 per cent while the government will give one per cent in the form of tax relief.

The white paper also revealed that this new policy will cost UK businesses an additional £2.6 billion every year. It also said that the Government knows that forcing employers to pay into their employees’ pensions will have an especially strong effect on small businesses and that is not yet counting the cost of administering the new pension scheme.

The white paper presented a solution to the dilemma but the solutions – higher prices or lower future wage increases – are considered as highly simplistic and ignores the intricacies of running a business.

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