Retail Autumn Statement 2015 review
On 25 November, the Chancellor delivered his latest Autumn Statement. In a year which has already seen two Budgets – which have both brought big changes to the retail sector, including the introduction of the new National Living Wage – retailers were perhaps understandably cautious about what this year’s Autumn Statement might bring.
In this article we summarise the key points arising from the Autumn Statement and focus specifically on what the changes may mean for the retail sector.
- No news on retail business rate relief
- Significant investments in UK transport links
- Small business rate relief to be extended for one more year
- Bigger firms hit by apprenticeship levy
- No Living Wage acceleration
Overall – not much change for the retail sector, but a glaring exemption?
Peter Wilmer, Partner at Hawsons, commented: “Although the Autumn Statement didn’t bring much news for the retail sector, there was a glaring exemption from the Chancellor’s speech. The Chancellor failed to give any clarity on the retail business rate relief, which is critically important to the sustainability and stability of many high street shops, restaurants and cafes. The sector is being left in limbo, and with the culmination of rising staffing costs through the National Living Wage, auto enrolment and rising energy costs, this has led to unwelcome uncertainty.”
“It is disappointing that the Chancellor has not recognised the ongoing and forthcoming financial pressures facing the retail sector. An extension of the retail business rate relief would have given businesses much needed support, but we will now have to wait until next year’s Budget. It could be that we see more retailers focus their operations online in an attempt to reduce input costs.”
Good news on apprenticeships
The government will introduce the apprenticeship levy in April 2017. It will be set at a rate of 0.5% of an employer’s paybill, which is broadly total employee earnings excluding benefits in kind, and will be paid through PAYE. Each employer will receive an allowance of £15,000 to offset against their levy payment. This means that the levy will only be paid on any paybill in excess of £3 million.
Pete Wilmer, Partner at Hawsons, commented: “A focus on apprenticeships is good news for the retail sector. The sector relies heavily on logistics firms to collect and deliver products which are sold both online and in-store, which brings supply-chain opportunities…but it also brings challenges. It is fair to say the transport & logistics sector is facing a driver shortage; there are simply not enough new drivers entering the industry. The looming lorry driver crisis poses a major threat to the retail sector and could see orders take much longer to be delivered and costs rise. The new apprenticeship funding will support jobs and, hopefully, provide some much needed certainty to the delivery of retail goods.”
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Pete Wilmer heads up the firm's Corporate Finance service offering. Having worked in the corporate finance arena for many years with a national accountancy practice and with a major corporate bank, Pete has a wealth of experience and a track record of delivering first-class outcomes for clients. You can contact Pete at [email protected] or 0114 266 7141. [/author_info]