Beer duty cut, fuel escalator scrapped, tobacco up 5.3%
Local retailers will benefit from a corporation tax cut announced in today’s budget, while the Chancellor also announced plans to the cut the first £2,000 from the National Insurance contributions of new employers.
Speaking in Parliament, George Osbourne said the new corporation tax of 20% gave the UK “the lowest business tax of any major economy in the world.”
According to the Chancellors plans, up to 450,000 small businesses across all industries would pay no jobs tax at all.
Also of note to retailers was the decision to scrap the fuel duty escalator, while beer duty was cut can 1p. Tobacco goes up 5.3%. There will also be faster payments for card transactions, which will enable retailers to improve their cashflow.
Responding to the Budget, ACS Chief Executive James Lowman said: “We welcome the Employment Allowance which will help local shops to take on more employees.”
However, Scottish Retail Consortium Director Fiona Moriarty said: “Whilst the UK Government’s ambition to cut Corporation Tax to 20% by April 2015 and make the UK the most competitive tax regime in the G20 is laudable but it’s focused on internationally mobile companies that can move their capital from country to country. For retail, a property-intensive sector, committed to Scotland and to the UK, it has been folly for both the UK and Scottish Governments to let Business Rates rise relentlessly.”
Lowman added: “We are delighted that thousands of our members will have the opportunity to benefit from Faster Payment Services. For small supermarkets and petrol forecourt stores, this will make a significant difference to cash flow, keeping more stores open and able to invest in their business and their community. We are working with the Treasury to ensure that this service is made available swiftly and at low cost to retailers.”
Beer duty cut, cigs up
Many trade associations were happy with the cut in beer duty, however the WSTA and Diageo were among those speaking out against an increase in sprits duty. Diageo said: “This move is disappointing. Cutting duty on beer while increasing it on spirits punishes the UK spirits industry for its success in this harsh economic climate. Scotch is the UK’s biggest food and drink export. This move risks that success.”
On tobacco, Jorge da Motta, Managing Director of JTI in the UK said: “The UK Government’s excessive tax on tobacco products puts the UK at the top of the criminals’ list of destinations for illicit tobacco. Today’s announcement of an increase of 5.3% will further encourage lawbreakers both large and small who will continue to deprive the Government in the UK of millions of pounds every day in uncollected duty through smuggled and counterfeit cigarettes.”