Factbox: UK firms flag hundreds of millions in costs from increase in national insurance, wages
15/11/2024 14:15
(Adds Young & Co Brewery's statement in paragraph 12)
Nov 15 (Reuters) - British companies have flagged a rise
of about 520 million pounds in costs following Finance Minister
Rachel Reeves' maiden budget in October, which included an
increase in employers' social security contributions.
They also expect the increase in National Insurance
Contributions (NIC) that employers pay and the minimum wages to
fuel inflation.
Here's what some of the firms from across sectors have said
so far.
RETAILERS
British supermarket chain Sainsbury's SBRY.L , which
employs around 150,000 people, said it was facing headwinds of
140 million pounds from the national insurance change.
Marks & Spencer MKS.L 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 ABF.L 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 HWDN.L 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 BT.L , 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 JDW.L , 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.
British pub group Young & Co's Brewery YNGa.L , which
employees about 7,700 people, warned that rising NIC and minimum
wages will increase its annual costs by about 11 million pounds,
starting April.
HOMEBUILDERS
British homebuilder Persimmon PSN.L expects costs from a
hike in national insurance to be about 5 million pounds over the
next year.
Peer Vistry VTYV.L also estimated a 5-million-pound impact
in fiscal year 2025 from the increase in employer NIC.
OUTSOURCERS
British outsourcing company Serco Group SRP.L 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 and Shinjini Ganguli)
((Prerna.Bedi@thomsonreuters.com; +91 98052 24616;))