Home Coronavirus Chancellor called to provide local support on business rates and VAT in Summer Statement

    Chancellor called to provide local support on business rates and VAT in Summer Statement

    Chancellor called to provide local support on business rates and VAT in Summer Statement
    Britain's Chancellor of the Exchequer Rishi Sunak is expected to make his Summer Statement today (Wednesday, 7th July)

    ACS (the Association of Convenience Stores) has called on the Chancellor of the Exchequer to use his summer statement by helping local shops invest in their future businesses.

    While Rishi Sunak is due to give his statement today (Wednesday July 8th), it is not intended to be a major fiscal event.

    There are still measures that the Government can introduce now that would support convenience stores in the coming months.

    Measures recommended by ACS include:
    • Extend the 100% business rates discount beyond 2020/21 and taper the reintroduction of rates bills
    • Extend the National Living Wage target of 2/3 of median earnings beyond 2024
    • Reduce employer National Insurance contributions
    • Expand the Retail Grant Fund threshold beyond £51,000 rateable value

    Petrol forecourts and convenience stores in high street and city centre locations are most likely to have suffered a large sales drop during lockdown, whilst having an average rateable value of more than £51,000 – meaning that they are not eligible for the Retail Grant Fund.

    ACS chief executive James Lowman said: “The support provided to thousands of local shops by the Government throughout the pandemic has ensured that they can continue trading, keep colleagues employed and focus on serving customers safely.

    “As we move into the next phase of recovery, the Chancellor has an opportunity to help local shops and other small businesses with additional certainty about their longer term costs, which in turn will stimulate investment and benefit communities.”

    In its submission to the Treasury ahead of the statement today, ACS said it has welcomed the potential removal of VAT on some products.

    However, calls have been made on the Chancellor to provide clarity on which food and drink products could have a zero VAT rate when sold in convenience stores.

    With a merging of food service and convenience in recent years, the Government must be clear on which products and scenarios the zero rate applies.

    Mr Lowman continued: “Any changes to VAT, whether an overall cut in the rate of VAT or specific changes to which categories and products are eligible for a zero rate of VAT, must be communicated clearly to businesses and be introduced with a reasonable notice period to mitigate the operational challenges associated with implementing such a change.”

    Figures from the 2019 Local Shop Report show that almost one in four (23%) convenience stores have some form of hot food counter or cabinet, with around one in six (15%) currently providing either indoor or outdoor seating for customers.

    The full submission to the Treasury ahead of the summer statement is available here.