(Reuters) – British companies are counting the impact on their businesses from Finance Minister Rachel Reeves’ maiden budget last week, which included an increase in employers’ social security contributions.
Some UK companies have flagged an aggregate total of around 500 million pounds in costs from an increase in National Insurance Contributions (NICs) that employers pay and the minimum wage. They also expect the move to fuel inflation.
Here’s what some of the firms from across sectors have said so far.
RETAILERS
British supermarket chain Sainsbury’s, which employs around 150,000 people, said it was facing headwinds of 140 million pounds from the national insurance change.
Marks & Spencer said the national insurance increase would cost it around 60 million pounds in its next financial year, which starts in April. A 6.7% rise in minimum wage will add another 60 million pounds.
Britain’s third-largest supermarket Asda said the national insurance change would cost it 100 million pounds next year and warned it would “probably be inflationary to some degree”.
Primark-owner Associated British Foods said the national insurance change would cost the clothing retailer, which employs 40,000 people in the UK, “tens of millions” of pounds, though the rise in the minimum wage was anticipated.
Kitchen and joinery retailer Howden Joinery said the expected annualised cost impact of higher contributions to employers’ national insurance and the increase in the national minimum wage was around 18 million pounds.
TELECOM
Telecom company BT, employer of more than 100,000 people, said the NIC change would increase its costs by close to 100 million pounds next year, about 0.5% of its total cost base.
PUBS & RESTAURANTS
JD Wetherspoon, a major British pub operator that employs more than 40,000 people, said its annual costs would increase by about 60 million pounds in 2025, with its NIC rising by an estimated two-thirds.
The budget increases would cause price rises across the hospitality sector, it said.
HOMEBUILDERS
British homebuilder Persimmon expects costs from a hike in national insurance to be about 5 million pounds over the next year.
Peer Vistry also estimated a 5-million-pound impact in fiscal year 2025 from the increase in employer NIC.
OUTSOURCERS
British outsourcing company Serco Group said the UK government’s national insurance tax changes would increase its direct labour costs by around 20 million pounds per year and that it was exploring ways to offset these costs.
(SOURCE: Company announcements, Reuters reporting)
(Reporting by Prerna Bedi and DhanushVignesh Babu in Bengaluru; Editing by Shilpi Majumdar)
