Retail bosses warn of £7bn cost burden after Budget

cityam11-19

Tesco is one of the 79 signatories of the BRC’s letter UK retail bosses have written to the Chancellor to warn of the wide-ranging damage from the Autumn Budget on their sector, including “inevitable”...

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we also recognise the role businesses have in supporting this,” the letter said. “But, the sheer scale of new costs and the speed with which they occur create a cumulative burden that will make job losses inevitable, and higher prices a certainty.”Retail businesses will be especially badly hit by the changes the government has made to employer NICs, the letter said, due to their rely heavily on part-time workers, many of which were previously exempt from the tax as their pay didn’t reach the old threshold.The wage threshold at which employers must start paying the tax has been lowered from £9,100 to £5,000, while the overall tax rate has risen 1.2 per cent to 15 per cent. Peel Hunt has estimated that retail firms in their coverage will see pretax profit fall by an average of 7.5 per cent as a result of the tax increase, although some will be hit much worse than others.\n\n“Headcount costs significantly impact how retailers operate their businesses,” analysts at the brokerage wrote. “The idea that this is simply an additional cost that retailers must wear is not really how this will land”.“While mitigation efforts will be prioritised, some stores may become unviable, projects may be shelved, and prices may rise.”The BRC’s letter also took aim at the government’s plans for business rates, which were the subject of an intense campaigning effort in the run-up to the Budget.Chancellor Rachel Reeves announced plans to raise the amount the top one per cent of business properties pay in business rates in order to enable a cut for smaller firms, in a move that staved off some of the warnings from bricks and mortar stores and businesses.\n\nBut signatories, which also included the chief executives of Asda, JD Sports and Next, said the changes will “merely distribute rates within the industry” as opposed to bringing the overall burden down. The BRC recommended delaying the introduction of a lower earnings threshold for national insurance, as well as delayed implementation of packaging levies and faster reform to business rates.The Treasury was contacted for comment.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2484995903"}