The British Retail Consortium (BRC) has written to Chancellor
, calling on him to raise the
employer National Insurance Contributions (NICs) threshold to
boost job creation at the Autumn Budget. The letter calls on him
to raise the threshold from £5,000 to £6,000, noting that this
would support job creation, particularly for entry-level roles.
The 2024 Budget change to the National Insurance contributions
(NICs) threshold, which came into effect in April 2025, cost
retailers £1.74 billion. Combined with the increase in the
headline employer NICs rate and two above-inflation annual rises
in the National Living Wage, retailers' employment costs have
spiralled by £6.5 billion in just two years.
The effects of the threshold reduction are particularly acute in
retail because of the industry's large number of flexible and
part-time roles. 55% of job roles are part-time, meaning many
workers were brought into the employer NICs threshold for the
first time. In the last two years, the cost of employing a
full-time entry-level worker increased by 15%, while for
part-time roles it rose by 19%.
The impact is clear to see: the number of retail jobs has
plummeted by 115,000 in just two years. This matters. Almost one
in four people get their first job in retail, making the industry
an essential route into work for young people and those with
limited experience or qualifications. As the largest private
sector employer, the industry and its supply chain provide
essential employment opportunities everywhere, from the smallest
village to the largest city.
The letter to the Chancellor also calls for measures to increase
investment around the UK, and make the current taxation system
fairer. This includes calls to address the rising taxes and
levies on retailers' energy bills, cancel the annual inflationary
increase to business rates, and remove all shops from the
high-value multiplier introduced in the 2025 Budget.
Helen Dickinson, Chief Executive of the British Retail
Consortium, said:
Retail has always been one of the great gateways into work,
giving millions of people their first job and the skills and
confidence to build a career. Previous changes to NICs hit retail
disproportionately hard and soaring employment costs are making
it harder for retailers to offer the crucial entry-level roles
that so many young people rely on.
The Chancellor can turn the tide on unemployment and tackle the
NEETs crisis that is robbing a generation of young people of
opportunity. Raising the NICs threshold to £6,000 would boost
retail job creation and ease the inflationary pressures bearing
down on the industry and its customers.
-ENDS-
2024 Budget:
The 2024 Budget made two major changes to employer National
Insurance Contributions (NICs)
- The employer NICs rate increased from 13.8% to 15%
- The secondary threshold the salary above which employers
start paying NICs was lowered from £9,100 to £5,000. This
significantly impacted retail, as it brought a large number of
part-time workers within scope of the tax.
Employment Cost increases
