The National Body Repair Association (NBRA) has today issued an urgent response to the Chancellor’s Autumn Budget, warning that the combined impact of rising Employer National Insurance contributions and National Minimum Wage hikes creates a financial emergency for the UK accident repair sector.
Martyn Rowley, Executive Director of the NBRA, has described the budget measures as a ‘fiscal sledgehammer’ for labour-intensive industries, specifically citing the increase in Employer National Insurance to 15% combined with the drastic lowering of the threshold to £5,000.
Martyn Rowley stated:
“Yesterday’s budget has placed an unprecedented burden on our members. The accident repair industry is, by its nature, labour-intensive. We rely on skilled technicians, apprentices, and administrative staff to keep vehicles safe and on the road. The Chancellor’s decision to increase Employer NI contributions while simultaneously slashing the secondary threshold is a direct tax on jobs in our sector.”
Key Budget Impacts on Bodyshop’s:
- Employer NI Hike: The rise in the rate to 15%, coupled with the threshold drop from £9,100 to £5,000, will add hundreds of pounds in statutory costs per employee, per year, regardless of profitability.
- Wage Inflation: The increase in the National Living Wage will not only raise the floor but force a vertical surge in salaries across the board to maintain differentials for skilled roles including the likes of panel beaters, paint technicians, and MET Technicians.
- Business Rates: While relief for retail is welcome, many larger repair facilities fall outside of relief thresholds, leaving them exposed to high fixed costs.
The Call to Insurers
The NBRA is categorically stating that Bodyshop’s cannot absorb these costs. Margins in the repair sector are already razor-thin following years of energy price shocks and parts inflation.
“Let me be clear,” Rowley continued. “These are statutory government costs. They are not efficiencies we can find, nor are they variables we can control. This budget effectively affects the net profit margin of the average Bodyshop overnight unless labour rates are adjusted.”
“We are calling on all insurers and accident management companies to recognise this new reality today. We do not need ‘reviews’ in six months; we need immediate rate increases that reflect the mathematical reality of this budget. If the supply chain is squeezed any further, we could see a wave of closures that in effect will leave motorists stranded and insurers with nobody to repair their policyholders’ vehicles.”
The NBRA will be issuing guidance to its repairer members on how to calculate exact per-hour cost impact of these changes to support their negotiations. With a significant rise in Employer National Insurance contributions and an increase in the National Living Wage, the NBRA will use a ‘new reality’ variables calculation.
