Did Higher Wages and National Insurance Costs Cut JCT600 Profits in 2025?
JCT600’s 2025 accounts show £3.2m extra cost from NI and wages, slightly lower profit and a shift to stronger used‑car margins.
Key financial figures for JCT600 in 2025
JCT600 disclosed that the combined rise in the National Minimum Wage and National Insurance contributions added an extra £3.2 million to its annual cost base for the year ending 31 December 2025. The additional tax pressure coincided with a modest dip in overall profitability.
Turnover slipped marginally from £1.335 billion in 2024 to £1.326 billion in 2025. Pre‑tax profit fell from £20.2 million to £20.1 million, echoing the slight contraction in revenue.
How did employment‑tax changes affect the cost structure?
Directors’ comments filed at Companies House stressed that “increases in the National Minimum Wage and National Insurance placed substantial additional cost pressure on businesses”. To mitigate this pressure, JCT600 launched a company‑wide cost‑out exercise that delivered a 0.64 % reduction in expenses across all divisions.
Expense control versus rising payroll costs
Even with the modest expense reduction, the £3.2 million uplift in payroll‑related spending was a clear headwind. The group highlighted that disciplined cost management was essential in a year when employment taxes rose sharply.
New‑car volumes versus used‑car performance
New vehicle sales declined by 2.08 % – a figure that compares favourably with the 2.64 % fall recorded across the brands represented by JCT600. Gross profit margin on new cars slipped by 0.2 %, a change the directors attributed to discounting required to meet Battery‑Electric Vehicle (BEV) targets.
In contrast, the used‑car segment showed stronger results. Turnover for used vehicles increased by 2.1 % and volume rose by 2.8 % (the UK market grew by 2.15 %). The uplift in volume was partially offset by a shift in product mix that reduced the average selling price of the vehicles.
Technology and agile pricing drive used‑car margins
JCT600 credited the deployment of new technology and a more agile pricing model for a 9.6 % rise in gross profit margins on used vehicles. The group described the outcome as “an excellent used vehicle performance”, suggesting that the used‑car business helped to cushion the overall profit decline.
What does this mean for the UK dealer market?
The JCT600 results illustrate how rising employment costs can erode margins for large dealer groups, even when turnover remains relatively stable. However, the ability to pivot quickly – through cost‑control programmes, technology adoption and dynamic pricing – can offset pressure on the new‑car side by extracting greater profitability from the used‑car market.