Arnold Clark, the car dealership behemoth, has disclosed that the tax increases announced by Rachel Reeves in her inaugural Budget as Chancellor are set to cost the company an additional £30m annually.
The Glasgow-based firm pinpointed the hike in employer's National Insurance contributions and the increase in the National Minimum Wage as the primary drivers behind the cost surge, as reported by .
Arnold Clark expressed concerns that the tax hikes "are likely to have significant impacts on the group and the wider automotive market".
This information was included in the latest financial statements for the group, which were recently submitted to Companies House.
The accounts show that Arnold Clark's revenue climbed from £4.9bn to £5.1bn in 2024, while its pre-tax profit ascended from £116m to £120.7m.
The rise in pre-tax profits is a rebound from a cyber attack and escalating costs that had previously slashed the company's earnings in 2023.
Following the uptick in financial results, Arnold Clark boosted its dividend payout from £15m to £21.9m.
Owned by Lady Philomena Clark and her family, the group was established by the late Sir John Arnold Clark, who died in 2017.
Reeves' Budget to have 'significant impact'
A statement approved by the board read: "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 further noted that the government-imposed ZEV (Zero Emission Vehicle) mandate is likely to result in a "remain volatile throughout 2025" scenario for the new vehicle market in the º£½ÇÊÓƵ.
Nonetheless, the firm expressed confidence that its strategy to expand its franchises and dealerships "leaves us well positioned to cope with such volatility and to take advantage of the increasing opportunities in the º£½ÇÊÓƵ market."
In the year 2024, Arnold Clark reported that it had ramped up its new car sales by 21.2 per cent, reaching 64,215 units, while its used car sales saw a more modest increase of 2.1 per cent, amounting to 191,699 vehicles sold.
