14 March 2023
The British Independent Retailers Association has said the forecast for the future from today's Spring Budget announcement looks brighter - but warns that businesses still are in for a rough few months ahead.
Bira, which works with over 6,000 independent businesses of all sizes across the UK, said they hope today's forecast for the future helps improve customer confidence and will drive economic growth.
Andrew Goodacre, CEO of Bira said: "The Chancellor was upbeat about the economy in that we are likely to avoid a recession and forecast growth is better than expected. We wanted to hear about plans for growth and we were told about new investment zones, increased capital tax allowances for business investment, and £200M in local regeneration.
"These are positive measures, but in long term are not necessarily addressing the challenges faced by businesses on the high street today.
“We were not expecting much from the Budget today and while we are pleased with the focus on growth, many of the big announcements are focused on long-term investment.
"We hope that the better economic forecasts and more people returning to work will improve consumer confidence – often the key driver for high street economic growth. Unfortunately, though there was nothing to ease the fears of indie retailers dealing with the pressures of today.
"The pressures of inflation, high energy costs, and energy support are set to reduce by 95% in April, and wages are set to increase by 9% in April. This budget may improve consumer confidence, but it does little to boost the confidence of businesses on the high streets throughout the UK," he added.
This is how some of the announcements may affect your business:
Energy Costs
Energy Bill Relief Scheme that ends on 31 March 2023.
For eligible business customers, a unit discount up to £6.97/MWh is automatically applied to gas bills - and up to £19.61/MWh on electricity bills - by your energy supplier. As before, energy-intensive industries will receive a higher discount to reflect the difference between a price threshold and the relevant wholesale price.
Business Taxes
Corporation Tax: as previously stated, the main rate will increase to 25% from 1 April 2023.
Value-Added Tax
There is no change to existing arrangements.
Capital Allowances
From 1 April until 31 March 2026, investing in eligible plant & machinery will qualify for a 100% first-year allowance for main rate assets. You will be able to write off the full cost in the year of investment - known as “full expensing”. If you invest in special rate (inc. long life) assets, they will also benefit from a 50% first-year allowance.
Plastic Packaging Tax
The rate for 2023/2024 will increase in line with CPI from 1 April.
Aggregates Levy
Rates will remain frozen for 2023-2024 - but this levy will return to being indexlinked - and will increase in line with RPI from 1 April 2024.
Landfill Tax
Rates for years 2023/2024 and 2024/2025 will increase in line with RPI from 1 April. This tax applies to England and Northern Ireland.
Payroll
National Minimum Wage: rates increase from 1 April 2023 as follows:
âš« 10.9% increase in 21-22 year old rate to £10.18 per hour.
âš« 9.7% increase in 18-20 year old rate to £7.49 per hour.
âš« 9.7% increase in 16-17 year old rate to £5.28 per hour.
âš« 9.7% increase in the apprentice rate to £5.28 per hour.
âš« Daily Accommodation Offset: 4.6% increase to £9.10. National Living Wage: 9.7% increase from 1 April 2023 from £9.50 to £10.42 for people aged 23 and over.
Transport
Road Fuel Duty: as expected, the Chancellor will extend the 5p per litre cut in petrol & diesel duty for another 12 months. But VAT at 20% that is added to the price you pay will not change.
Vehicle Excise Duty: from April 2023, rates for cars, vans & motorcycles will go up in line with RPI.
But VED for HGVs will remain frozen for years 2023-2024.
Reform of HGV Road User Levy: ministers will introduce a newly reformed levy from August 2023 - after the end of the current freeze period.
Van Benefit Charge and Car & Van Fuel Benefit Charges: from 6 April 2023, charges will increase in line with the Consumer Prices Index.
Electric Vehicles: from April 2025, electric cars, vans & motorbikes will have to pay Vehicle Excise Duty like petrol and diesel vehicles.
Company Car Tax: current rates are set until April 2028 to provide long-term certainty.
Regional & Local Government
Investment Zones: Mr Hunt re-announced the current policy on these zones that will now concentrate on universities in “left behind areas” to help build 12 knowledge-intensive growth clusters in all 4 home nations. He has earmarked £80 billion over 5 years for zones in England.
Levelling Up Partnerships: Mr Hunt announced £400 million to regenerate 20 of the most-needy districts. The following are invited to bid: South Tyneside; Redcar & Cleveland; Middlesbrough; Hull; Doncaster; Wakefield; Blackburn with Darwen; Oldham; Rochdale; Stoke; Sandwell; Walsall; Mansfield; Bassetlaw; Boston; Tendring; Rother; Hastings; Torbay and Torridge.
Stay up to date and sign up for our newsletter for more