Support on duty, business rates, the National Minimum Wage and VAT are top of local retailers’ demands as next week’s Budget gives Chancellor Alistair Darling a chance to impress the sector before the General Election.
A freeze on alcohol and tobacco duty heads the wish list for what will be the last Budget of this Parliament.
Further price hikes would only drive shoppers out of their local stores and towards cheaper sources of supply such as the supermarkets and the illicit trade, the Association of Convenience Stores (ACS) said.
In its 2010 Budget submission, the ACS also called on the government to resist an increase in the National Minimum Wage in 2010/11, and to reconsider the proposed rise of 1% in National Insurance contributions.
ACS chief executive James Lowman said that retailers would struggle to take on any further costs when many were already bowing under the strain of the VAT increase and higher business rates.
Retailers are also hoping that a call for an increase in Small Business Rates Relief thresholds won’t go unanswered. More than 50% of small businesses cited business rates as the biggest barrier to their growth in the next 12 months, a recent survey by the Federation of Small Businesses (FSB) found.
The FSB is also demanding an immediate review of the flat-rate VAT paid by grocers, newsagents and tobacconists with a turnover of less than £150,000 a year.
The group condemned as “covert” a recent rise in flat-rate tax schemes. FSB national chairman John Wright said the 1.5% hike was “unacceptable” at a time when cash flow was limited.
“What has become apparent is that after VAT was put back to 17.5% in January, nearly half of the flat rate schemes have seen the VAT level rise above the pre-decrease level.
“This is nothing more than a stealth tax deliberately directed at small businesses during the recession,” Wright added.
❝ Business rates and tax on tobacco and alcohol are my key concerns. Our alcohol prices are getting increasingly more expensive while the supermarkets seem to be getting cheaper and cheaper. They can afford to absorb these hikes, we can’t. The government really needs to pay more attention to the smaller players in the Budget instead of just giving us another token mention.”
Doug n Di’s, Heaviley, Stockport
❝ It’s time the government committed to supporting small businesses instead of stabbing us in the back. Funding and grants to see us through this challenging time would be a great help, but it also needs to improve communication of schemes so retailers are aware of them.”
Ahmed Newsagents, Coventry