The Chancellor is being urged to extend relief on business rates

The government has been urged to extend the current business rate relief scheme by at least another 12 months by the Association of Convenience Stores (ACS).

The proposal is amongst a raft of measures recommended by the ACS to the Chancellor ahead of the Spring Statement later this month, to support local shops with rising costs and the looming reintroduction of business rates bills.

The support provided by the government on business rates over the last two years has enabled thousands of stores to continue trading and serving their communities, according to the ACS, but the UK is far from operating at ‘normal’ pre-Covid levels. To continue supporting local shops, it is recommending that the Treasury, at a minimum, should continue the existing business rate relief of 66% for retail businesses for another 12 months to April 2023.

ACS has also welcomed the government’s consultation on the introduction of an online sales tax to rebalance the contribution of online and bricks and mortar businesses. However, it recommends that universal sales taxes should not be seen as a replacement for the business rates system, as they hit lower margin businesses like local shops the hardest.

With local shops facing many rising costs ACS is calling on the Government to lessen the blow by rethinking the planned increase in employer national insurance contributions.

On upcoming regulations, ACS has highlighted the £92m implementation cost of proposed rules restricting the promotion and placement of high fat, salt and sugar products in convenience stores, as well the millions of pounds allocated to equip enforcement officers with tape measures to check businesses are compliant from October. ACS has called on the Government to scrap these proposals and instead invest the cost of enforcement in cracking down on the illicit alcohol and tobacco markets that cost retailers and the government billions of pounds every year.

ACS chief executive James Lowman said: “Our recommendations to the government set out a comprehensive set of measures that would provide real support to local shops at a time when many are considering whether they will still be able to keep the lights on in 12 months’ time. This is not the time to be heaping additional costs onto retailers – this is the time to create the conditions to ensure that retailers and their colleagues can continue serving their communities and play their part in the UK’s long term recovery from the economic shock of the last two years.”

Additional measures recommended in the submission to the Treasury ahead of the Spring Statement include:

  • freeze alcohol and tobacco duties to avoid driving consumers to the black market and away from responsible retailers;
  • freeze fuel duty to help consumers and businesses with the cost of getting around;
  • freeze the business rates multipliers for the financial year 2023/24;
  • remove VAT from deposit return scheme deposits and encourage investment in reverse vending machines through rates exemptions and permitted development rights; and
  • give the Low Pay Commission the freedom to set minimum and living wage rates independently of political targets after the 2/3 median earnings target has been reached in 2024.