ACS (the Association of Convenience Stores) has reacted to the 2022 Spring Statement, highlighting the significant cost increases facing retailers in the year ahead despite measures announced to support businesses.
In the statement, Chancellor Rishi Sunak MP announced a temperate package of support measures to help businesses, including an increase in the Employment Allowance to £5,000 from next month and business rates exemptions for green investment being brought forward to next month (was previously scheduled for 2023). This is coupled with previously announced measures such as the 50% business rates discount in 2022-23 for retail and hospitality businesses, and a freeze in the business rates multiplier in 2022-23.
ACS chief executive James Lowman said: “We welcome the Government’s focus on supporting energy efficient investment with a zero VAT rate. The UK’s post-Covid economic recovery and the objective of levelling up can only possibly be met by encouraging private sector investment through fiscal incentives and creating the right regulatory environment for businesses, wherever they trade.
“Support for members including the Employment Allowance increase and the previously announced 50% reduction in business rates will help, but both of these measures only give limited support to businesses operating a number of convenience stores who can only claim up to £110,000 in business rates relief, as well as only being able to claim the Employment Allowance for the business as a whole, not for individual stores.”
The main theme of the Chancellor’s speech was providing additional support to consumers to deal with rising costs and inflation. From 6pm tonight (Wednesday), there will be a fuel duty cut of 5p per litre, and from April, the employee National Insurance threshold will rise by £3,000 to bring it in line with the income tax threshold. The Chancellor also announced a longer term plan to cut the basic rate of income tax to 19p (currently 20p) from April 2024.
Mr Lowman continued: “Our colleagues will be pleased to see the threshold at which they start paying National Insurance Contributions go up, so now many will not pay them at all. Mirroring this measure for employer NICs would have been a game-changing decision that would have helped thousands of small shops to counter high inflation and rocketing energy costs. Unfortunately most local shops are facing a cost crunch that some may not be able to navigate.
“The 5p cut in fuel duty will grab headlines and our members who sell fuel will be pleased to see this tax come down. Fuel retailers are paying price increases that far outstrip this tax cut, so we are likely to see higher than normal pump prices until global political and economic instability settles and the price of oil falls.”
The full Spring Statement documents are available here: https://www.gov.uk/government/publications/spring-statement-2022-documents
