Budget 2013 - Deloitte comments on impact of the Budget for retailers
20 March 2013
Commenting on the impact of today’s Budget for retailers, Tim Haden, tax partner in Deloitte’s consumer business practice, said:
“Good news for the retail sector comes in the form of a reduction to the UK corporation tax rate to 20% from April 2015. This will significantly benefit UK-based retailers, which represent some of the largest UK corporation tax payers. In addition, it will hopefully encourage additional inward investment.
“However, any retailer expecting consumers to have more money in their pockets as a result of this budget may be disappointed. Whilst some measures announced reduce the tax burden on lower/middle income families including the Personal Allowance increases (to £10,000) and a freeze of petrol duty, unfortunately, this is more than offset by reductions to tax credits and state benefits which will take effect from next year.
Nevertheless, retailers with large part-time workforces on minimum, or close to minimum wage, may find many employees are no longer required to pay income tax. An adult worker on the national minimum wage can now work for 31 hours a week without having to pay tax. Some retailers may also find the new ‘employee shareholder’ scheme attractive.
“Disappointingly, there was no change announced with regards to business rates rises. The Government have missed an opportunity to provide relief to retailers during a difficult period for the high street. The sector was hopeful that a 2% cap on the inflationary linked rate increase would be announced.”
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