The Entertainer, one of the UK’s largest toy retailers, has abandoned plans to open two new stores following the government’s decision to raise employer National Insurance (NI) contributions.
Chief Executive Andrew Murphy explained that the increased costs have also led to a hiring freeze at the company’s head office.
The decision underscores mounting business concerns over the Budget’s changes, which increase the NI rate for employers from 13.8% to 15% from next April, with the tax threshold reduced from £9,100 to £5,000. The policy is expected to raise around £25 billion annually to stabilise public finances, following revenue cuts under the previous government.
Speaking to BBC Radio 4’s *Today* programme, Murphy said, “There’s no argument with the government’s ultimate goals… simply the balance with which they pursued them.” He highlighted that The Entertainer had completed viability assessments for two new locations, but the NI rise shifted the financial outlook, leading to the store closures.
Other major companies, including Sainsbury’s and Marks & Spencer, have hinted that increased NI rates may lead to higher prices as businesses seek to manage rising costs. Sainsbury’s CEO Simon Roberts estimated that the supermarket chain faces £140 million in additional costs, warning, “It is going to feed through into higher inflation.”
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