Making Work Pay - Greggs Workers Bonus Goes Mainly to the Government

UNIVERSAL CREDIT - The government has been urged to think again about its tax and benefit rules for low-paid workers after it emerged that some staff at the bakery chain Greggs could get to keep just a quarter of their £300 annual bonus as a result of universal credit deductions.

Greggs announced last week that its 25,000 workers would receive a windfall of up to £300 under a £7m reward scheme linked in part to the success of the company’s vegan sausage rolls.

However, benefits experts have pointed out that some staff who are on universal credit will keep as little as £75 after tax and national insurance (NI) are paid and bonus earnings clawed back by the government at a rate of 63p in the pound.

It beggs the question of why taxpayers are having to subsidise workers wages. Sales at Greggs have surpassed the £1bn mark for the first time in the company's history.

The bakery chain reported an increase in sales from £960m to £1,029m to the year ending 29 December. 

The Newcastle-based firm posted a 15 per cent rise in pre-tax profits, which have risen to £82.6m.

Image: Greggs vegan sausage roll has boosted profits. 

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