Big 4 supermarkets face £200m blow from National Insurance hike

Britain’s biggest supermarkets face paying an extra £200m in National Insurance contributions as the Chancellor is set to unveil the hike in the Budget tomorrow.

Tesco, Sainsbury’s, Asda and Morrisons could be hit with an incremental tax bill from a two-percentage point hike in employer National Insurance contributions, Sky News reported.

One analyst estimated that Tesco, which employs around 300,000 people in the UK, could be facing £75m added to its bill.

M&S CEO Stuart Machin accused the government of taking “the easy way out” on reports it was looking to raise taxes.

“Raising these taxes isn’t the hard decision, it’s the easy way out. It might improve the public finances in the short term, but it makes economic recovery harder and hits our customers and colleagues still struggling with the cost of living.”

Retailers are also set to face an increase in wage bills as Chancellor Rachel Reeves confirmed that minimum wage would increase 6.7% while the National Living Wage will increase 6% from £11.44 to £12.21 an hour from April 2025. The minimum wage for 18-20 year olds is going up by £1.40 per hour to £10.

Paddy Lillis, general secretary of shopworkers union Usdaw, said: “Usdaw very much welcomes these significant pay increases for the lowest paid, after a three-year long cost-of-living crisis under the Tories. We are pleased that Labour’s new remit for the Low Pay Commission has resulted in progress towards delivering a statutory real living wage and started on the road to ending rip-off youth rates.”

The union has long petitioned for a legal minimum hourly rate of over £12 per hour, and said it is now “looking for a roadmap to achieve £15”.

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