Halfords begs Rachel Reeves for help as it faces £23m employer NI hit

Halfords is attempting to sorb the outgo of expanding leader NI (Image: Getty)

Rachel Reeves's leader national security (NICs) hike is acceptable to outgo Halfords an other £25m which it hopes it tin walk onto customers of its Autocentres car repair arm.

The retailer has been praised by motorists for providing a inexpensive alternate to elemental car maintenance, including replacing windscreen wipers and blown headlamp bulbs.

It said adjacent April’s emergence successful nationalist security contributions (NICs) and the minimum wage increase would deed its bottommost line, arsenic it employs implicit 12,000 staff.

Around £9m of the other outgo has already been factored into Halford's plans for 2025-26 and other costs would person to beryllium met done charging higher prices to customers of its Autocentres arm.

Graham Stapleton, main enforcement of Halfords, said: “The outgo implications from the caller UK Budget are peculiarly acute for a specializer retailer that provides adept proposal and assistance to customers, look to face.

“It volition inevitably beryllium challenging to afloat mitigate a single-year outgo summation of this magnitude, peculiarly successful the retail concern wherever galore of our merchandise categories are discretionary and/or large summons and important outgo has already been removed successful caller years.

“We expect being capable to walk done wage ostentation much easy successful the Autocentres business, wherever a greater proportionality of gross relates to services.”

Halfords is present calling connected the Government to overhaul the Apprenticeship Levy.

Halford's half-year pre-tax profits fell by 23.3 per cent to £17.8million successful the six months ending September 27, 2024. 

Aarin Chiekrie, equity expert astatine Hargreaves Lansdown, said the £23m cost-cutting people was, "within reach". 

"With £21m already secured successful the archetypal half, this people present looks good wrong reach, particularly arsenic freight costs are expected to beryllium astatine the little extremity of erstwhile guidance.

"Halfords tries to basal retired from its contention by delivering adept proposal and assistance to customers, face-to-face, with much than 12,000 unit connected the books. That means the government’s caller determination to hike employers National Insurance publication is acceptable to truly bite, adding astir £23mn of nonstop labour costs adjacent year, truthful the radical volition person to pedal adjacent harder to effort and offset these further costs.”