The Chancellor has delivered his final Budget of the parliament ahead of the election in May. One of the headlines grabbing a lot of attention was the announcement of 1p off a pint, reductions in other alcohol duties and a freeze in wine duty. This is good news for an important category in convenience stores. A reduction in duty rates on alcohol alongside a renewed commitment from HM Revenue & Customs (HMRC) to clamp down on duty fraud and the upcoming introduction of an alcohol wholesaler registration scheme are all positive steps toward tackling the damaging illicit trade.
Unfortunately, the government has not made the same commitments on tobacco. Duty rates will continue to rise, plain packaging has now been confirmed as going ahead and stores will have to cover their gantries from April 6 all measures which are likely to drive customers toward criminals selling cheap tobacco. The Budget report makes new pledges to tackle the illicit trade I’ll believe it when I see it.
The biggest announcements affecting our sector the confirmation of the Low Pay Commission’s recommendation of a 3% increase in the minimum wage and the launch of a fundamental review of the rates system were actually announced a couple of days before the Budget. The rates review is something that we and other business groups have been seeking for several years.
Forecourts are one of the business types that are significantly adversely affected by the way that business rates are currently set, and we hope that one of the key outcomes of the review will be that there is more fairness in the rating system for these stores, in addition to having a rating system that is reviewed more frequently than every five years to ensure that valuations are accurate. The review is also important for forecourts due to the way that the market is changing more investment in technology such as CCTV, ATMs and items such as Amazon lockers will all have an effect on the rates bill of a store.
Overall, this was a safe Budget with a clear objective to appeal to voters. The real challenges will come when the next government whatever colour(s) it is unveils its programme after the election, and it’s our job to ensure that local shops are given every opportunity to succeed.