Arnold Clark counts the cost of Rachel Reeves’ tax hikes
Car dealership giant Arnold Clark has revealed the tax hikes announced by Rachel Reeves in her first Budget as Chancellor will cost it an extra £30m a year.
The Glasgow-headquartered group said the increase in employer’s National Insurance contributions and the rise in the National Minimum Wage will mainly be responsible for the rise.
Arnold Clark said the tax hikes “are likely to have significant impacts on the group and the wider automotive market”.
The update has been included in new accounts for the group’s latest financial year which have just been filed with Companies House.
The results have revealed Arnold Clark’s revenue increased from £4.9bn to £5.1bn in 2024 while its pre-tax profit rose rom £116m to £120.7m.
The increase in its pre-tax profit comes after a cyber attack and rising costs significantly cut its earnings in 2023.
Off the back of its improved financial performance, the group increased its dividend from £15m to £21.9m.
The group is owned by Lady Philomena Clark and her family and was founded by Sir John Arnold Clark, who passed away in 2017.
Reeves’ Budget to have ‘significant impact’
A statement signed off board said: “Whilst the Autumn Budget delivered in October 2024 seems a long time ago, it contained a number of proposals that are likely to have significant impacts on the group and the wider automotive market.
“The increase in employer National Insurance contribution rates, the lowering of the NIC threshold and significant increases to National Minimum Wage rates… are expected to increase our average wage-related costs by £30m.”
Arnold Clark added that the government’ imposed ZEV (Zero Emission Vehicle) mandate will mean that the UK new vehicle market will “remain volatile throughout 2025”.
However, the company said its strategy of expanding its franchises and its dealerships “leaves us well positioned to cope with such volatility and to take advantage of the increasing opportunities in the UK market.”
In 2024, Arnold Clark increased its new car sales by 21.2 per cent to 64,215 while used car sales rose by 2.1 per cent to 191,699.