Retailers have expressed dismay that no concessions were made to the hardships being experienced by the sector in today’s Spring Statement, despite significant cost rises being on the immediate horizon.
The Chancellor of the Exchequer, Rachel Reeves, began her Statement by making clear it would “not contain any further tax increases”, and while that was indeed the case, the Association of Convenience Stores (ACS) has said rising taxes were “already being felt” by the industry.
Forthcoming increases to employers’ National Insurance contributions, together with a rise to the National Living Wage, have businesses in a pincer movement from April, while forthcoming Inheritance Tax changes mean family-owned firms face a triple whammy.
The ACS’s chief executive, James Lowman, voiced dismay that while Reeves “again stated today that promoting business investment is central to her strategy”, the changes announced in last autumn’s Budget “are in fact making it harder for businesses to invest”, with shopkeepers “cutting back wherever they can to cover the additional costs” ahead next month, when the Budget’s tax hikes begin to bite.
The ACS says over 1,000 convenience store firms report a decline in staff hours across the sector as businesses attempt to stave off increasing costs.
Lowman warned, though, that “for many businesses, there are no further staffing cuts to be made”, with there being a very real prospect of store closures, which will represent the “loss of essential local services”.
One announcement in the Spring Statement concerned increasing penalties for late payment of income tax and VAT, a move welcomed by the Car Wash Association. The organisation’s executive director, Gordon Balmer, said: “illegal hand car washes have for too long been flouting regulations and ignoring the corresponding fines with impunity”, and that HMRC had been letting this go ”totally unenforced”. Balmer added: “These measures will be welcomed by compliant car wash operators across the country, but we will have to wait to see if any action is actually taken.”
