The chancellor failed to address any major areas impacting the sector, which is likely to leave retailers continuing to struggle for the rest of 2024.
Whilst the government confirmed in the Autumn statement 2023 that a Business Rates discount of 75% for qualifying retailers would continue into the 2024/25 tax year, we had hoped that the government would switch from using the September 2023 CPI to the April 2024 projected CPI, which could save retailers a total of £1.92bn. However, nothing was specifically mentioned and therefore retailers should brace themselves for increased business rates, even with the discount, and build them into their forecasts going forwards.
National Insurance
The budget did confirm that National Insurance is again dropping by another 2p in the £1, therefore providing the public with more disposable income, which hopefully will provide a small boost to the sector.
Sadly, there was no mention of lowering Employers National Insurance for retailers, which would have been a huge boost to the sector. This was very much a budget for the people rather than for the business sector.
Pension Pots
There was some good news for retail staff, in that they will soon be able to move their pension pots when they move jobs, in order to stop the confusing nature of potentially having multiple pensions pots. However, this will likely be an administrative burden for retailers, and may cost them more if they need to pay into multiple pension pots.
We had hoped the chancellor would tackle the areas we covered in our budget wish list. Such areas were:
Reinstating tax free shopping, which would have provided overseas residents a VAT exemption on goods they acquire in the UK. Reintroducing this scheme had the potential to increase footfall, and income, for retailers from overseas tourists visiting the UK.
There was no mention to the National Living Wage, where we had hoped there was a consultation with the Low Pay Commission for a sustainable increase that aligns with broader economic conditions. Therefore the 9.8% increase remains in place for over 21s with higher increases for younger staff, which will increase retailers wages bills, and Employers NI liabilities.
In Summary, there is nothing to really excite retailers, that they didn’t already know, so hopefully the economy continues to grow and inflation continues to fall, to assist the retail sector for the rest of the year.