The Association of Convenience Stores has welcomed the Chancellor’s action to support businesses through green investment incentives.
In his Budget speech to Parliament today, Chancellor Rishi Sunak MP announced that green investments such as solar panels and heat pumps would be exempt from business rates. Additionally, investment in improvements to businesses will not be subject to business rates for 12 months after that investment is made. Subject to confirming eligibility, local shops will also benefit from a 50% reduction in their rates bills for 2022/23.
On business rates incentives, ACS chief executive James Lowman said: “It was great to see the Chancellor announce action to incentivise investment through the business rates system, something we have been calling for in our discussions with Ministers for many years. The 50% relief on 2022/23 business rates is a significant step towards our recommendation for a full exemption for premises under £51,000 rateable value. While these measures are welcome in the short term, they must be supported by long term reform of the business rates system that ensures that retailers can focus on driving growth, efficiency and productivity. Convenience stores have kept Britain going through the pandemic and are at the heart of our recovery and future growth.”
The Chancellor also announced widespread changes to the duty rates system, reducing the total number of alcohol duty rates from 15 to six in an attempt to simplify the system. However, the Chancellor is also introducing a new 5% ‘draught relief’ on draught beer and cider sold in the on-trade.
On alcohol duty rates, Mr Lowman said: “On one hand, the Chancellor is implementing reform of duty rates to make the system simpler, but on the other, the new ‘draught relief’ will make the system more confusing. As the line between on-trade and off-trade becomes increasingly blurred, duty should be applied at the highest point of the supply chain. We urge the Government to focus on tackling the billions of pounds worth of non-duty paid alcohol that is damaging responsible retail businesses and the communities that they serve.”
In April 2022, the National Living Wage will rise to £9.50 per hour for staff aged 23 and over, with the National Minimum Wage rising to £9.18 per hour. This is in line with the Government’s existing policy ambitions to raise the National Living Wage to two thirds of median earnings by 2024.
On National Living Wage increases, Mr Lowman said: “The increase in the National Living Wage to £9.50 is in line with the established policy of this rate equalling two-thirds of median earnings by 2024. This will bring a pay rise for many of the 392,000 people working in local shops, but significantly increase the costs of those running these stores, who are working longer and longer hours to keep their businesses afloat.
“We now need to see an Employment Bill to tackle the burgeoning shadow labour market based on avoiding paying the National Living Wage and other costs, using gig economy practices to undercut the flexible and secure work offered by local shops.”
Additional measures announced in the Budget that will affect the UK’s 47,079 convenience stores include:
- The £1m annual investment allowance will be extended to March 2023 (was previously set to end in December this year)
- Business rates revaluations will take place every three years from 2023
- The planned increase in the business rates multiplier in April 2022 will be cancelled
- There will be a 50% business rates discount for qualifying retail businesses for one year up to a maximum of £110,000.
- The duty premium of 28% on sparkling wines will end, resulting in these products paying the same duty as still wines of equivalent strength
- The planned duty increases on alcohol have been cancelled
- The planned duty increases on fuel have been cancelled
- Duty rates on all tobacco products will increase and the minimum excise tax will increase by RPI +3% this year
The full Budget document is available here: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1028813/Budget_AB2021_Print.pdf
