Warning retail job cuts ‘inevitable’ after NI tax rise in Budget

The 79 signatories of the letter range from big British retailers – such as Aldi, Asda, Boots, Currys, Lidl, Marks and Spencer, Primark, and Sainsbury’s – to charity shop group the British Heart Foundation and trade group Associated Independent Stores.

From next April, all large businesses will have to pay higher National Insurance Contributions (NICs) for every member of staff they employ. Employer NICs will start at a lower threshold than now- at £5,000 instead of £9,100. And the rate will rise from 13.8% to 15%. The BRC calculates this will cost British retailers £2.33bn a year.

The rise in the minimum wage from April is set to cost the sector a further £2.73bn, the BRC letter said.

In addition, from October 2025 a new packaging levy comes into force.

Introduced by the previous government, the extended producer responsibility (ERC) scheme shifts the cost of recycling from local councils onto the companies that use the packaging. Smaller firms are exempt, but the new levy will cost the retail sector overall another £2bn, the BRC estimates.

The letter calls for the government to phase in the introduction of the NI changes and delay the start of the ERC.

It also urges the government to reduce business rates, a property-related tax which the BRC says will cost retailers an additional £140m a year after next April.

A Treasury spokesperson told the BBC that, thanks to exemptions for smaller businesses, “more than half of employers will either see a cut or no change in their national insurance bills [and] there will be £22.6bn more for the NHS”.

A business update from Begbies Traynor on Monday, external gave some weight to the BRC’s warnings, as the consultancy predicted a rise in “support from our insolvency and business recovery professionals” due to both the NI change and higher interest rates.