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The Association of Convenience Stores (ACS) has urged the Government to avoid adding to the cost of employer National Insurance Contributions (NICs) ahead of the Budget on 30 October, warning any increase would cost tens of millions of pounds for the convenience sector alone.

At their current level, employer NICs will cost the convenience sector £312m in 2024, compared to around £221m last year. Retailers have to pay NICs for any staff aged 21 or over earning more than the lower threshold of £175 per week. Employer NICs are currently charged at a rate of 13.8%.

Employer NICs from the convenience sector have been rising significantly in recent years as a result of increases in the National Living Wage rate, which have put more colleagues above the £175 a week threshold where the tax is charged to employers.

The ACS has calculated that each percentage point increase in the rate of employer NICs would cost the convenience sector an additional £36m. If the Government were to increase employer NICs by two percentage points to 15.8%, this would result in a 23% increase in the amount that retailers have to pay.

James Lowman, ACS chief executive, said: “The Government has committed to promoting investment and growth, but any increase in the level of employer NICs would have the opposite effect in our sector. Recent increases in the National Living Wage have already resulted in significant hikes in the amount of employer NICs paid by our sector, so additional increases on top of those that retailers are already dealing with would be excessive and lead to difficult decisions at a store level about investment and staffing levels.

“We urge the Chancellor to make her first Budget one that supports employers instead of imposing additional tax burdens on them.”

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