Tesco is facing a £1billion increase in national insurance after Rachel Reeves hiked employer contributions by 1.2 percentage points, reports suggest.
The bill for Tesco, which employs 300,000 people in the UK and expects operating profits of £2.9billion this year, is based on an analysis by Morgan Stanley, according to the Sunday Times.
It comes after the bosses of Sainsbury’s, Asda and Morrisons detailed the rises they are facing, which add up to a combined £1.3billion over the course of this parliament.
Chancellor Rachel Reeves is hoping to raise an extra £25 billion for the public coffers through the employer national insurance contributions hike.
But industry bosses warned the move could lead to soaring costs and job cuts, with some companies saying they would do “everything they can” to avoid passing the buck to consumers.
From next April, employers will have to pay NI at 15 per cent on salaries above £5,000, instead of 13.8 per cent on salaries above £9,100 currently.
The change is set to raise £25billion a year, making it one of the biggest single tax-raising measures in British history.
Pubs and restaurant chains have been vocal about the tax increases over the last week, with Wetherspoon chief Tim Martin saying he believes “all hospitality businesses” are planning to pass on higher costs through price rises.
He said on Wednesday: “Cost inflation, which had jumped to elevated levels in 2022, slowly abated in the following two years, but has now jumped substantially again following the Budget.”
Chris Jowsey, chief executive of Admiral Taverns, which has more than 1,420 pubs across the UK, said the measures will cost the sector “significantly”.
He pointed to a cut from 75 per cent to 40 per cent in the relief given to pubs on business rates, a tax on businesses which operate physically. Labour has said an overhaul of the system will take place in 2026/27.
It comes after the boss of Primark’s parent company said he felt “the weight of tax rises” is falling on the UK high street, as he said the company’s national insurance bill will rise by “tens of millions” of pounds.
George Weston, chief executive of Associated British Foods, which also owns food and sugar brands, said the business is preparing for a big jump in costs.
Elsewhere, billionaire inventor Sir James Dyson took a swipe at new inheritance tax measures which he said will “kill off homegrown family businesses”.
