Dear Contractor,
| EXTENSION: Thank you to everyone who has provided information so far. The closing date has been extended to 10th February 2025 so if you have not provided your information yet then there is still time to do so. Your support is greatly appreciated with this matter. |
| The following changes, announced in the Autumn budget, will impact considerably Community Pharmacy payroll costs from April 2025: |
Minimum Wage:
1. The minimum wage for over 21s, known as the National Living Wage, will increase by 6.7%, from £11.44 to £12.21 from 1 April 2025.
2. For 18- to 20-year-olds, the minimum wage will increase from £8.60 to £10.00.
3. Apprentices will also see a wage increase, from £6.40 to £7.55 an hour.
National Insurance:
4. Employer National Insurance contributions (currently 13.8%) are to increase to 15% from April 2025.
5. The salary threshold where employer National Insurance contributions begin will be reduced to £5,000 per year.
6. The Employment Allowance for small businesses will be increased from £5,000 to £10,500.
CPNI’s initial estimate indicates approximately £10m additional cost impact for the community pharmacy sector next year. We have advised SPPG accordingly and are seeking mitigations against these cost increases. You will also be aware of joint representations having been made by CPNI-BDA-BMA-ONI on this matter (CPNI CU#241202B). SPPG and DoH(NI) also recognise that significant changes to National Living Wage (NLW) and National Minimum Wage (NMW) arrangements from 1st April 2025 obligate community pharmacies to review and increase all staff salary/wages from April 2025 and we have been asked by SPPG for assistance in obtaining information from contractors on the impact of the above budget changes on sector payroll costs in 2025/26.
Many of you will have linked with your payroll and/or accountancy advisors to establish the cost impact for you next year and your assistance is therefore sought in relation to providing the anticipated monetary impact of the following payroll costs in 2025/26 for your pharmacy business:
1. Total increased salary/payroll costs anticipated in 2025/26 compared to the current year. The impact of the E’er NIC changes referred to above should also be provided.
2. The number of pharmacy staff that this relates to.
3. The percentage of the increased costs that relate to staff with any NHS related activity.
4. The number of pharmacies to which the information relates to.
We previously gathered information relating to the periods 2021/22, 2022/23 and 2023/24 payroll/tax years. Can we ask that you also include the 2024/25 costs alongside the anticipated 2025/26 costs?
If possible, can you provide an estimate of your payroll (Salary/pension/E’er NIC) cost increases between 2023/24 and 2024/25 to demonstrate the impact of the April 2024 NMW/NLW changes (including the impact those changes had on the payroll cost increases for other higher paid staff members)?
Additional pension contribution costs will also be required in due course given that increased pension costs are also a natural consequence of NMW/NLW increases.
As indicated above your payroll and/or accountancy advisors may be able to help you to provide the information we are seeking.
A number of contractors have already linked with CPNI to provide initial information and we acknowledge and appreciate that. We know there are many demands on your time at present but would ask that you try to provide the information listed above to office@communitypharmacyni.co.uk no later than Monday 3rd February 2025.
Any information provided to CPNI will treated as private and confidential, it will be internal to CPNI office staff only and it will be shared only with SPPG in an anonymised and collated format for the purposes outlined above.
Please do not hesitate to contact CPNI office should you need additional information or clarification in relation to this request.
Kind regards,
GERARD GREENE
Chief Executive
