Supermarket giants face £200m hit from Reeves' NI hike

29 October 2024, 11:17 | Updated: 29 October 2024, 13:49

Britain's four biggest supermarket chains face paying an extra £200m in national insurance contributions (NICs) between them as the chancellor prepares to raise tens of billions of pounds from a raid on businesses.

Sky News understands that Tesco, Asda, J Sainsbury and Wm Morrison could be hit with the incremental tax bill from a two percentage point hike in employer NICs in the wake of Rachel Reeves' budget on Wednesday.

One analyst said the £200m figure was "a credible estimate" given the scale of the grocers' collective workforces in the UK.

They added that Tesco, which employs roughly 300,000 people in Britain, could pay approximately £75m alone more in employer NICs.

Between them, the quartet employ more than half a million people in the UK.

The supermarkets would be among the businesses most affected by a two percentage point increase in employer national insurance contributions - an increase which has been widely trailed in recent days and on which the Treasury has declined to comment.

Read more from Sky News:
More than 1,000 Ford staff to strike
How budget could hit struggling families
Mattress firm taken to court

In an article for The Times last week, Stuart Machin, chief executive of Marks & Spencer, urged the chancellor not to increase taxes, calling them "a short-term, easy fix".

"M&S; is one of the biggest taxpayers in the UK, contributing £480m to the Treasury," he wrote.

"Yet when I hear about plans to increase national insurance, a tax with no link to profit which hits bigger employers like us and our smaller suppliers, I'm concerned.

"The chancellor was right in the past to call national insurance a tax on workers."

None of the supermarkets contacted by Sky News would comment on Tuesday.

(c) Sky News 2024: Supermarket giants face £200m hit from Reeves' NI hike