KwikFit has plans to “increase prices” for customers as a direct result of Labour’s plan to hike employer’s national insurance (NI) fees. Mark Slade, Kwik Fit managing director, warned plans were in place to increase the price of products to offset the increased costs.
He warned the decision could also hit staffing, with bosses not looking to replace individuals in senior positions. The motoring repair experts have predicted the new NI contribution increases would cost the firm around £5 million with consumers likely to feel the sting. Mr Slade made the suggestion while speaking to the BBC, highlighting the effect NI rises were having on businesses across the UK.
He told the BBC: “We are really careful to make sure KwikFit is always competitive and benchmarked against the people around us – but the reality is that includes increasing prices.”
“There will be some people who aren’t replaced over the coming year and that will be in the senior levels.”
Labour Chancellor Rachel Reeves confirmed that national insurance contributions (NICs) would increase from 13.8% to 15% back in the Autumn Budget.
From April 6, businesses will also start paying NI on workers’ earnings over £5,000 instead of £9,100.
Officials have claimed the extra increase and lowered threshold could generate an extra £25 billion a year in revenue by the end of the 2029/30 tax year.
However, there are fears the plan could backfire with the Office for Budget Responsibility (OBR) warning the move could lead to “lower wages and profits”.
HM Revenue and Customs (HMRC) revealed their response while stating the potential “economic impact” of the new NIC increases.
They said: “The Office for Budget Responsibility (OBR) estimated the increase in employer NICs will reduce the level of potential output by 0.1% at the forecast horizon, by reducing labour supply by around 50,000 average hours equivalent.
“The OBR judged that the increase in costs to businesses would lead to lower wages and profits.”
Shortly after the Autumn Statement, KwikFit rival Halfords suggested the decisions could impact road users.
Graham Stapleton, chief executive of Halfords, also warned it could pass increased costs onto customers.
He added: “The cost implications from the recent UK budget are particularly acute for a specialist retailer that provides expert advice and assistance to customers, face to face.”
