Royal Mail's sneaky plan to handle new tax changes raises eyebrows
Royal Mail quickly found ways to deal with new employer tax changes - through price hikes and staff cuts. Their fast response to chancellors budget changes makes other companies think about similar steps
In a swift-moving development‚ Rachel Reevesʼs new employer tax changes got an unexpected fast response from Royal Mail. The postal service quickly worked out that theyll need about £120m to handle these new costs - and their solution is pretty straight-forward: higher prices and fewer workers
The retail world isnt happy either; big stores say theyre looking at a £7bn cost jump next year (which is making everyone nervous). While John Lewis is still trying to figure things out Royal Mail jumped right in with their math-homework done
Last years service wasnt great - they got hit with a £5.6m fine from Ofcom for missing delivery targets. Now theyʼve raised stamp prices 5 times since 03/22‚ making first-class mail cost almost double. The companyʼs boss‚ Martin Seidenberg says: its not just stamps weʼre looking at; everything is on the table
We are looking at all products ... that includes parcels and also business mail
The timing is interesting because Daniel Kretinsky‚ a Czech business-man‚ wants to buy Royal Mail with a £3.6bn deal. This deal would add lots of debt to an already money-losing company; the government seems ok with this though since they dont want to pay for a bail-out
Hereʼs what businesses did during covid times:
* Airlines fired lots of workers then tried to get them back
* Stores complained about safety costs while making good money
* Many used covid as an excuse for changes they wanted anyway
Companies might use these new tax rules just like they used covid - as a nice-to-have reason for making changes they wanted to do anyway
