2015 Summer Budget for Retail
George Osborne has unveiled his latest budget – his seventh since becoming chancellor. With plenty of cuts to come how does this affect the retail industry?
Well perhaps the most exciting prospect is the cut in corporation tax. Corporation tax is to be cut to 19% in 2017 and 18% in 2020. There is speculation however that this cut is an attempt to put pressure on larger companies to raise its wages.
On top of this small firms’ national insurance contributions will fall and have a £3,000 employment allowance.
Perhaps the most pertinent proposal is the relaxing of Sunday trading laws. The power to decide Sunday trading regulations will be devolved to local governments in England and Wales.
Since 1994 and the passing of the Shops Act, small stores have been able to open for usual shopping hours but stores larger than 3000 square feet are only allowed to operate for 6 hours between 10am and 6pm.
During the London 2012 Olympics and Paralympics, Sunday trading laws were relaxed allowing large stores to remain open during the weekend.
The idea is to help stores be able to better compete with their online counterparts. However, many small stores are worried they will lose business as more people can go to their preferred supermarket instead. Smaller stores may feel the pressure from their larger competitors as well as have to pay higher wages.
There is also a concern that there won’t be a consensus amongst local authorities on whether to change operating laws. This could lead to confusion for customers who shop in different areas.
If you’re in the retail industry tweet us your thoughts about the budget at @RetsoStudio.