Responding to the Chancellor's Budget, Helen Dickinson, Chief
Executive at the British Retail Consortium, said:
“It was a mixed bag Budget that offered relief for many shops,
but brought in new costs for others. Retailers face a delicate
balancing act as they strive to invest, hire, and keep prices
affordable. The announced permanent reduction in retail business
rates is an important step to reduce the industry's burden from
this broken tax. Yet the decision to include larger retail
premises in the new surtax does little to support retail
investment and job creation. The welcome plan to scrap the
damaging de minimis loophole was weakened by a 2029
deadline. And while increases in the National Living Wage were in
line with expectations, the rise to the minimum wage for
under-21s could limit employment opportunities. All in all, we
will see winners and losers across retail and the impact for
consumers will unfold in the coming months, but this Budget does
not go far enough to mitigate the inflationary pressures already
bearing down on the industry.”
Business Rates:
“This Budget offered much-needed relief for some retailers, but
fell short of the bold action needed to secure the long-term
future of our high streets and mitigate the inflationary
pressures which are currently pushing up prices for households.
While the announced changes to business rates are a step in the
right direction, many felt the Chancellor should have gone
further. The 5p rates reduction for retail, hospitality and
leisure properties with a rateable value below £500,000 is
unlikely to fully fix the situation where retail, as 5% of the
economy, pays over 20% of all business rates. Including
supermarkets and anchor stores in the new surtax is a retrograde
step that does little to mitigate the rising cost of food and
essentials. Larger stores, which already pay one third of the
industry's business rates bill and employ around a million
people, should have been exempted from a surtax intended to fund
support for the high street.”
On Employer NI and National Living Wage:
“Retail employment costs have risen significantly over the last
year, with last year's Budget changes to employer National
Insurance and the National Minimum Wage adding £5 billion to
retail costs. With food inflation nearing 5% and 100,000 jobs
lost in retail over the last year, further cost rises are
challenging for retailers to absorb, given tight retail margins.
But the NLW uplift announced by the Chancellor was in line with
the core expectations announced by the Low Pay Commission,
providing stability for retailers' financial planning.
“The higher increases for under 21s, when coupled with concerns
of retailers about the implications of some provisions in the
Employment Rights Bill, will do little to encourage the
employment prospects of younger people.”
On Salary Sacrifice:
“Changes to salary sacrifice will hurt retail employees and
businesses alike. For many retail colleagues, this will act as a
brake on their pension savings. For retailers, these changes will
cost hundreds of millions, punishing those businesses with strong
pension offerings, and/or forcing them to reduce the
contributions they make to their employees' retirement security.”
On Low Value Imports:
“While we welcome the decision by the Chancellor to close the de
minimis loophole, the proposed timeframe is simply too long.
There are 1.6m parcels arriving in the UK every day, double what
they were last year, and businesses cannot afford any delay on
scrapping the existing rules. The US has already removed its
threshold, with the EU following suit next year; the Chancellor
must take decisive action and remove the exemption as fast as
possible. This will help protect British consumers from the risks
of imported goods that don't meet the UK's stringent
environmental and ethical standards, while promoting fairer
competition.”
On the Soft Drinks Industry Levy:
“Supermarkets invested huge sums to bring down the sugar content
of their own-brand drinks, which is why no own-brand supermarket
products currently pay the Levy. However, by lowering the sugar
threshold and including milk-based drinks, some own-brand
products will begin to be captured. This will push up the prices
paid by consumers at a time when food inflation is high.”
On removal of VAT on direct donations:
“This small tweak by the Chancellor will make a big difference
and open the doors for more retailers to donate goods directly to
the charities and organisations delivering help and aid to
families everywhere. It rectifies a quirk of the tax system which
previously meant that while donations of goods for onward sale
received VAT relief, donations of goods intended to be given to
people free of charge incurred a financial penalty.”
