More than 30 retailers warn of price hikes in blow to shoppers amid Budget tax raid fallout
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TWO-THIRDS of leading retailers have warned that they will be forced to push up prices to cope with the increase to National Insurance costs announced in the Budget. Around 35 of 52 chief financial officers (CFOs) surveyed by the British Retail Consortium said they would raise prices in response to the cost increase.
![[Christmas Eve shoppers on a busy high street.]](https://www.thesun.co.uk/wp-content/uploads/2024/12/last-minute-shoppers-christmas-eve-959626054.jpg?strip=all&w=960)
From April 6, 2025, Employer National Insurance rates will rise by 1.2% to 15%. At the same time, the threshold at which employers must pay National Insurance will be reduced from £9,100 a year to £5,000. Just over half of the CFOs surveyed said they would be reducing their paid number of hours and overtime.
Meanwhile, around 24 said they would reduce headcount in stores. Some 70% of respondents said they were “pessimistic” or “very pessimistic” about trading conditions over the next 12 months. The news comes after 81 retail chief executives wrote to the Chancellor to voice their concerns about the economic consequences of the Budget.
They claimed the announcements could raise the industry’s costs by more than £7billion in 2025. In the Budget Chancellor Rachel Reeves announced a raft of measures that will hit businesses in the pocket from April. Among them is an increase to the National Living Wage.
Employers will now be forced to pay staff £12.21 an hour, an increase of 77p. Meanwhile, changes to the reformed packaging levy will transfer the cost of collecting and sorting packaging from local authorities to producers. Previously employers paid a fee of 37% but this will rise to 100%.
