Feb 5, 2025
Hugo Walker
First, it was soaring energy prices. Then came rising transportation costs and supply chain disruptions. Now, food manufacturers are bracing for yet another challenge.
This April, the UK government will introduce significant changes to employers' National Insurance contributions (NICs) and the Employment Allowance. These changes are set to impact small and medium-sized businesses, including those in the food manufacturing sector.
Changes to Employers' National Insurance Contributions
Effective from 6 April 2025, the employers' NIC rate will increase from 13.8% to 15%. Additionally, the secondary threshold — the earnings level above which employers start paying NICs — will decrease from £9,100 to £5,000 per year. These adjustments mean that more of your employee’s earnings will be subject to NICs, increasing your overall employment costs.
Enhancements to the Employment Allowance
To mitigate the impact of rising NICs, the Employment Allowance will increase from £5,000 to £10,500 annually, effective April 2025. This allowance enables eligible employers to reduce their annual NIC liability. Notably, the previous restriction that disqualified employers with a NIC liability exceeding £100,000 from claiming the allowance will be removed, making more businesses eligible.
Implications for Small Food Manufacturers
For smaller food manufacturers, these changes present both challenges and opportunities. While the increase in NIC rates and the lowering of the secondary threshold will raise employment costs, the enhanced Employment Allowance offers a buffer to offset some of these expenses. It's crucial to assess your eligibility for the allowance and incorporate these changes into your financial planning to maintain profitability.
Leveraging Technology
In light of these developments, adopting technological solutions, like Mezze, can help streamline operations and reduce reliance on extensive customer service teams. Our industry-leading platform is specifically designed for food manufacturers to achieve this, providing a fully branded ordering and automation platform that offers features such as:
Automated Order Management: Your customers can place orders directly through the platform, reducing customer service resource needs by 60% and virtually eliminating costly manual errors.
For example, Samworth Brothers scaled from zero to 1,000 delivery points in mere weeks — achieving this with only a single customer service team member, thanks to Mezze.Real-Time Communication: Keep your customers informed with real-time updates on orders, inventory and delivery schedules, boosting transparency and enhancing their overall satisfaction.
If your customers have come to expect this seamless experience from B2C platforms like Amazon in their personal lives, why shouldn’t your business offer the same exceptional standard of service?Data Analytics: Mezze provides detailed insights into customer ordering patterns, enabling you to predict demand more accurately and optimise inventory levels.
Not only does this lower your operational costs by minimising excess inventory and associated storage expenses, but also reduces waste, as fewer unsold products are discarded.Cost Efficiency: By digitising the ordering process, Mezze helps lower administrative overheads, which is particularly beneficial when facing increased employment costs.
Rather than manual data entry, your customer service team can be redeployed into more valuable and rewarding roles, freed up to provide genuine service to your customers when they need it most.
Proactive Planning
The upcoming changes to NICs and the Employment Allowance necessitate proactive planning for small and medium-sized businesses. By understanding these adjustments and leveraging platforms like Mezze, food manufacturers can navigate the evolving financial landscape, maintain competitiveness and continue to thrive.
If you'd like to learn how Mezze’s ordering and automation platform can enhance your food manufacturing business, contact us today.
