The Association of Convenience Stores (ACS) has urged the UK Government to avoid adding to the cost of employer National Insurance Contributions (NICs) ahead of the Budget on October 30th, warning that any increase in the rate would cost tens of millions of pounds for the convenience sector alone.
At their current level, employer National Insurance Contributions will cost the UK convenience sector £312m in 2024 compared to around £221m last year. Retailers have to pay employer NICs for any staff in their business that are aged 21 or over and earn more than the lower threshold of £175 per week. Employer NICs are currently charged at a rate of 13.8%.
Employer National Insurance Contributions from the convenience sector have been rising significantly in recent years as a result of increases in the National Living Wage rate, which have put more colleagues above the £175 a week threshold where the tax is charged to employers.
ACS has calculated that each percentage point increase in the rate of Employer NICs would cost the convenience sector an additional £36m. If the Government were to increase employer NICs by two percentage points to 15.8%, this would result in a 23% increase in the amount that retailers have to pay.
ACS chief executive James Lowman said: “The Government has committed to promoting investment and growth, but any increase in the level of employer National Insurance Contributions would have the opposite effect in our sector. Recent increases in the National Living Wage have already resulted in significant hikes in the amount of employer National Insurance Contributions paid by our sector, so additional increases on top of those that retailers are already dealing with would be excessive and lead to difficult decisions at a store level about investment and staffing levels. We urge the Chancellor to make her first Budget one that supports employers instead of imposing additional tax burdens on them.”
The convenience sector currently employs around 445,000 people, 82% of whom work more than 16 hours a week.
