ACS

ACS has reacted to the Pre-Budget report expressing disappointment that the Chancellor did not go further in reducing the cost burden on retailers.

ACS Public Affairs Director Shane Brennan said: “The Chancellor has made some dramatic changes to the tax environment for businesses. We welcome a number of the measures targeted at small businesses in particular. However for the retail industry the Pre-Budget missed the opportunity to make a radical difference to the financial pressures on the industry.

“We made clear to the Chancellor that the best way to help the retail sector is to postpone increases in business rates next year, and also to urgently review plans for implementation of the 2010 revaluation. These two planned rate increases have the potential to put the most pressure on convenience retailers.”

“We are also very concerned that far from keeping taxation on alcohol and tobacco at the same level, the Chancellor has increased the tax take in almost all cases. For example this means that he has increased alcohol duty by 17% this year. Every time the Government raises duty levels it pushes more people into the black market and fuels an unscrupulous multi billion pound criminal network.”

The key points for ACS from the Chancellor’s announcement are:

• Reduction in VAT from 17.5% to 15%
• Increase in fuel, alcohol and tobacco duty to offset reduction in VAT
• Freeze on increase in small business rate of corporation tax
• £1 billion Small Business Finance Scheme
• Increase in thresholds for empty property relief

Mr Brennan continued: “We understand the importance of maintaining access to credit for businesses. We welcome this and also measures to assist businesses in difficulty, whether it be through more flexible tax repayment plans, offsetting of operating losses against previous profits, or the Small Business Finance scheme.

“We are however concerned about the long term prospects of increased taxes. The planned increase in National Insurance contributions from 2011 will place further pressure on wage bills. We will be urging the Chancellor not to impair the recovering economy by placing disproportionate burdens on retail businesses.”