Trade bodies representing independent and convenience retail sectors have welcomed the Chancellor’s measures to stimulate growth and cut taxes in the short term, while calling for longer term support on energy costs.
Measures announced by Chancellor Kwasi Kwarteng MP in today’s mini-Budget include:
- 40 new Investment Zones, providing targeted tax reliefs for new businesses
- The April 2022 rise in both employee and employer National Insurance rates will be reversed
- Corporation tax rates will be frozen at 19 per cent
- The Annual Investment Allowance will be permanently set at £1m from April 2023
- Beer, cider, wine and spirit duties will be frozen at their current levels from February 2023
- Reducing the basic rate of income tax to 19 per cent from April 2023
“We welcome that the government’s plan aims to stimulate growth and incentivise investment by businesses,” ACS chief executive James Lowman said. “In the last 12 months local shops have invested £605million in improving services, making their businesses more sustainable, and creating secure local jobs.”
Earlier this week, the Government announced the details of an Energy Bill Relief Scheme for businesses, which will benefit anyone with a fixed contract agreed from April 2022, as well as those on variable or deemed contracts.
The scheme will provide discounts to businesses on their energy bills through a Government supported wholesale price. The actual level of support provided to retailers will depend on their current kWh rate, with the intention of the scheme to be equitable to consumer support, which will see kWh rates of around 35p for electricity from October. However, the scheme will only last an initial six months, with a review after three months.
Lowman continued: “The biggest issue facing local shops in recent months has been the cost of energy. The support being provided in the coming six months will act as a lifeline for thousands of businesses, but the Government must continue to support local shops in 2023, especially the most vulnerable facing difficult decisions in the Spring.”
The British Independent Retailers Association said the measures would be much welcomed by businesses.
“Reversing or cancelling increases in National Insurance and corporation tax will reduce the cost burden faced by independent retailers. Along with the energy support announced this week, we now hope that retailers can plan and fully focus on this all important final quarter of the year (traditionally the busiest time of the year for many retailers),” BIRA’s chief executive Andrew Goodacre said.“We also hope that the measures introduced to support households will restore consumer confidence and encourage shoppers back to the high streets. Consumer spending needs to increase or many independent retailers and high streets in general will continue to struggle,” he added.