M&S tax grab claim: Stuart Machin cites £150m in extra costs as half-year profits more than double

Marks & Spencer chief executive Stuart Machin has levelled an extraordinary charge at the government, describing what he calls an M&S tax grab that he says is “one of the biggest tax grabs in history” he has seen. He made the remark on the day the retailer reported a sharp recovery in half-year profits following last year’s cyber attack.

Speaking after last week’s Budget, the first from Chancellor John Healey, Machin dismissed the package as “a whole lot of nothing”. Healey had pitched it as support for households and high street firms facing the economic fallout of the Iran war. Machin said it did not address the need for growth, and that “when you look at the last three Budgets, you can’t just ignore” the scale of what has been raised in tax.

Where the M&S tax grab claim comes from

According to City AM’s account, Machin told journalists the three Budgets since Labour took office have raised roughly £73bn in extra taxation. That figure comes from his remarks as reported, and the other coverage reviewed here does not independently verify it.

The company’s own numbers are more specific. M&S says taxes and higher labour costs have added about £150m to its cost base since the 2024 Budget. The latest Budget’s business rates changes, which sounded benign in the headlines, will add another £10m to a bill City AM puts at about £170m a year. Machin said he saw no sign of the pressure easing.

Packaging charges are another sore point. The reports differ slightly on the detail: one says M&S has absorbed about £35m from increased packaging taxes this year, while another quotes Machin saying the company paid £40m out of its food margin in a single month after April’s new levy. Either way, he argued the charge had been sold as a way to fund recycling but was effectively a Treasury tax.

Business rates row and consumer confidence

The rates announcement has angered retailers more broadly. Healey said bills had been frozen for high street firms, but they continue to rise with inflation. City AM reports a 3.5 per cent increase that would add about £250m to retailers’ costs over the coming year.

Machin also linked the political climate to shoppers’ mood. GfK data showed consumer confidence suffering its sharpest fall in a decade in September. He criticised recent government advice to stockpile three days of provisions, saying that being told to prepare invites people to worry. Grocers, the reports say, had been caught off guard by that guidance.

The M&S boss said he is “cautious about recruitment” because of employment costs and fragile consumer sentiment. Before the Budget he had urged the Chancellor to adopt six measures, including lower packaging levies and a reversal of rises in employment costs. He said five were ignored. He did welcome progress toward an agreement to cut post-Brexit checks on food and agricultural exports, noting that current rules make moving stock to its Republic of Ireland stores “very problematic”. Aligning food standards with the EU, he said, would be a “big win”.

Profits rebound despite the cost pressure

The complaint comes against a strong recovery. Adjusted pre-tax profit for the 26 weeks to September 26 rose to £403.2m from £184.1m a year earlier, though that remains below the same period in 2024. City AM reported a £355m pre-tax profit, which appears to be a different measure, though the sources do not explain the gap. Group sales rose 16.2% to £9.25bn.

Food led the way, with sales up 13.9% and volumes up 11.9%, helped by new stores and investment. Fashion, home and beauty sales rose 17.5% as online trading recovered after the attack that halted web orders for around six weeks and left shelves empty. That division still “fell short of its potential” because of lingering product availability problems, and was described as being in the “foothills” of its recovery. A hot summer also dented store sales.

Machin said the company enters the second half “in a strong position”, with a solid October. His message to Westminster is that a business growing this fast still feels squeezed, and that, in his view, the M&S tax grab is making expansion harder. The government’s reply to his specific claims is not included in the coverage reviewed.

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