The hike in National Insurance Contribution (NIC) which came into force in April is set to impact deader profitability hard.
That’s the view of MT Top 200 Dealer Group analyst Chris Oakham, who looked at the total NIC bill for the Top 200 Dealer Groups in 2025 and looked ahead at the cost to the bottom line for dealers.
“Looking forward to the financial years of 2024 and 2025, there are challenges. Apart from the minimum wage increase, perhaps the biggest is the Labour government’s raid on employers’ national insurance contribution (NIC), starting in April 2025. With this in mind, the 2023 levels of NIC for the MT Top 200 were collected. These totalled £538m.
“To calculate the extra employers’ NIC due from April 2025, the average 2023 salary was inflated based on Office for National Statistics (ONS) trends.
“The employers’ NIC was then calculated at the old rate and new rate and multiplied by the 2023 staff numbers.
“On this basis the extra NIC due for the MT Top 200 from April 2025 would be £140m per annum. Compared to 2023 the extra NIC due would be £200m. Whichever way you look at it, this represents a huge hit on profits,” said Oakham.