Sunak brings forward two new rates reliefs; National Insurance contributions cut by £1000
Chancellor of the Exchequer Rishi Sunak leaves 11 Downing Street for the House of Commons to deliver his Spring Statement on March 23, 2022 in London, England. (Photo by Leon Neal/Getty Images)
Chancellor Rishi Sunak on Wednesday set out a series of business support measures in his Spring Statement.
This includes a £1,000 increase to Employment Allowance to benefit around half a million SMEs. The relief, which allows smaller businesses to reduce their employers National Insurance contributions bills each year, has been increased from £4,000 to £5,000.
The cut is worth up to £1,000 for SMEs and starts in two weeks’ time, on 6 April. As a result, 50,000 of these businesses will be taken out of paying NICs and the Health and Social Care Levy, taking the total number of firms not paying NICs and the Levy to 670,000, the Treasury said in a statement.
The Chancellor also announced two new business rates reliefs will be brought forward by a year to come into effect in April this year. There will be no business rates due on a range of green technology used to decarbonise buildings, including solar panels and batteries, whilst eligible heat networks will also receive 100% relief. Together these are expected to save businesses more than £200 million over the next five years.
Sunak also reduced the VAT on energy saving materials such as solar panels, heating pumps and roof insulation from 5 per cent to zero for five years.
The Chancellor said he will examine how the tax system - including the operation of the Apprenticeship Levy – can be used to encourage employers to invest in adult training.
The support for SMEs comes on top of 50% business rates relief for eligible retail, hospitality, and leisure properties, also coming in this April and worth £1.7 billion for small businesses. The Help to Grow Management and Digital schemes, worth thousands of pounds per business, and the £1 million Annual Investment Allowance are also available to continue supporting UK businesses.
Responding to the Spring Statement, Helen Dickinson, chief executive of the British Retail Consortium, welcomed the review into Apprenticeship Levy.
“We are heartened to hear that the Chancellor has heard our concerns and is set to examine whether the Levy could be improved, to allow businesses to invest in the right training,” she said. “We urge him to introduce measures which allow high-quality short courses in functional skills, allow Levy funds to cover associated training costs, and allow a wider range of courses to be supported.”
She however added that the business rates burden needs to be addressed to increase investment by retail businesses.
“Currently, retail businesses pay 25% of all business rates, despite accounting for 5% of the economy. The announcement of a 50% relief is a welcome help to small businesses but will have little impact on the industry’s £8 billion business rates bill. Better news was given through the announcement that the ‘green investment relief’, that supports environmental property improvements, will be brought forward. This will support the investment the industry is making to become net zero by 2040, ten years ahead of the government target,” she commented.
Prices of some chocolate products have risen by 50 per cent in a year while many have also shrunk in size, states a recent report, raising the concern of shrinkflation among shoppers ahead of Easter celebrations.
The latest report by Which?, the price of eggs made by big names including Cadbury, Mars and Terry’s have risen by as much as 50 per cent in some cases while some have also shrunk in size, according to research by consumer champion Which?.
While official figures published on Wednesday showed inflation slowing to 2.8 per cent in February, a breakdown of the headline figure shows food prices rose 3.3 per cent with the cost of chocolate raced higher, up by a massive 16.5 per cent.
Chocolate has been getting more expensive for several years due to poor harvests in west Africa, in particular Ghana and Ivory Coast, where more than half of the world’s cocoa beans are harvested.
The recent analysis by Which? shows that in one of the discounters, the cost of Terry’s Chocolate Orange mini eggs has risen from 99p to £1.35, while its packet is now reduced from 80g to 70g.
At a supermarket, the price of a Cadbury Creme Egg 5 Pack Mixed Chocolate Box 200g has risen from £2.62 in the run-up to Easter 2024 to £4 this year, equating to 53 per cent price increase per 100g year on year.
On the other hand, Nestlé’s KitKat Chunky milk chocolate Easter egg stayed at the same price in the run-up to Easter year on year at £1.50 but reduced in size from 129g to 110g, making it 17 per cent more expensive per 100g.
Addressing the claims, Mars Wrigley said that, due to rising manufacturing costs, it had adjusted some of its product sizes to minimise changes to its list price.
Nestlé said significant increases in the cost of cocoa had made it much more expensive to manufacture its products and it has “sometimes been necessary to make adjustments to the price or weight of some of the products”.
SPAR North of England has launched Fyffes’ new ethical trade brand Trudi’s in a UK exclusive for bananas.
The large premium bananas are free of plastic packaging and are available in a paper banded pack of five or loose, including as part of SPAR Meal Deals. This is meeting shifting customer demands and is driving sales in store.
'Good Fruit, Doing Good’ is Trudi’s consumer claim and brand DNA which is giving back directly to communities that grow them.
This is supporting the building of school facilities, empowering women in their careers, and providing nutritious meals to communities where Fyffes own farms and supplier farms are located.
Fyffes has brought a choice of tropical produce to millions around the world in its 130-year history, and SPAR customers in Northern England have gained a taste for the new Trudi’s brand with encouraging boosts in volume into stores and sales through the tills.
Wilf Whittle, Trading Controller at James Hall & Co. Ltd, said: “We have been working with Fyffes for years now. We enjoy an excellent relationship with them, and we are delighted to be making the first move in the UK market with their new Trudi’s brand. The quality of fruit is excellent, and we are offering an improved sized and specification with Trudi’s.
“Modern day consumers like to know where their fruit is coming from, and we were cautiously optimistic that customers would take to the brand. When customers think of quality ethical and sustainable bananas, we want them to think of SPAR.
“The purple branding really stands out in store, and it has triggered a purple patch for our sales of bananas in the large, banded packs of five, and with the loose single fruit.
"We pride ourselves on availability, and while the market across retail has been short recently following shipping delays, we maintained full availability which is a credit to all involved within this supply chain.”
Toni Direito, Sales Manager at Fyffes Group Ltd, said: “Trudi’s is founded on consumers’ desire to not only eat healthy, fresh, and nutritious produce but to ensure that the fruit we eat is also doing good in the communities and with the people who cultivate our fresh produce.
“We are on a mission to show the world that nothing tastes better than knowing your fruit is doing good and our Trudi’s brand is deeply rooted in creating the best for both worlds – our growers in Central America and our consumers in Europe.
“A huge thank you to SPAR and James Hall & Co. Ltd for embracing the vision and taking the lead in ensuring communities benefit while providing a choice to consumers who wish to give back and do good by buying a purpose driven brand.”
James Hall & Co. Ltd is a fifth-generation family business which serves a network of independent SPAR retailers and company-owned SPAR stores across Northern England six days a week from its base at Bowland View in Preston.
A food and drink makers body is calling on the government to work with industry to boost growth and the competitiveness after a recent survey drop in the confidence among the maker as inflationary pressures including energy, labour and raw material costs gain pace.
According to the Food and Drink Federation (FDF), business confidence plummeted to -47 per cent in the final three months of last year, down from -6 per cent in the previous quarter, as companies in the sector were hit by measures announced in the October budget.
The confidence score among the country’s 12,500 food and drink businesses has slid to its lowest level since the final quarter of 2022, a time when inflation was surging after Russia’s invasion of Ukraine earlier in that year.
Rising energy and commodity costs are among the pressures facing food and drink manufacturers in the coming year, according to the FDF’s state of industry report, as well the costs associated with government policies, such as changes to employers’ national insurance contributions (NICs).
Food and drink businesses are also due to carry the lion’s share of new packaging rules known as the extended producer responsibility (EPR) scheme designed to improve recycling rates and tackle plastic pollution estimated to cost at least £1.4bn a year from October.
The FDF said the financial pressures weighing on confidence were causing businesses to reconsider investment, which could affect growth in the industry.
More than half (54 per cent) of the businesses that responded to the FDF’s survey said taxation was the leading factor that would constrain investment over the coming year, while 52 per cent said forthcoming regulation would act as a barrier to investment.
As higher labour costs bite, almost two-thirds (64 per cent) of manufacturers said their main motivation for investment was workforce efficiency, as they aimed to increase productivity from their current employees rather than hiring more staff.
“This marked decline in business confidence shows that government and industry needs to take action now to ensure we have a thriving, productive food and drink industry into the future,” said Karen Betts, the FDF’s chief executive.
“With pressures on industry mounting, government must act to remove the roadblocks and accelerate growth.”
The FDF is calling on the government to work with industry on regulation to boost growth and the competitiveness of the UK’s food and drink sector.
A range of measures has been recommended, including securing a share of the UK’s research and development spend for food and drink manufacturing to encourage businesses to invest in developing new products and healthier choices for consumers.
It is also calling for government and industry to work together on a workforce and skills plan and for ministers to prioritise a more strategic approach to trade relations with the EU, which despite Brexit remains the sector’s most important trading partner.
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Fed’s national deputy vice president Hemanshu Patel
Independent retailers will seriously think twice about providing Payzone services in their stores following the news that the company is increasing its fees by 3.5 per cent from April, the National President of the Federation of Independent Retailers (the Fed) has warned.
Letters advising of the increase have been arriving with members since the beginning of this month. They state that the increases to its weekly charge to £5.54 - and to £8.85 for those offering card processing - are in line with its annual retail index price adjustment.
Payzone says that the move will enable the company to continue investing in service improvements, security updates and partnerships that bring value to its network of retailers.
Describing the increase as a bitter pill for Payzone retailers to swallow, Mo Razzaq said, “Members who are affected by these fee increases may seriously think twice about continuing to offer Payzone services.”
They took effect as businesses prepared to face the perfect storm of higher wage costs and rises to employers’ national insurance contributions, Razzaq continued.
The Fed’s national deputy vice president Hemanshu Patel added that he had already cancelled his Payzone contract.
Mr Patel said: “Payzone has become an unsustainable service for retailers like me. The system is slow, unprofitable, and has seen little meaningful improvement over the years.
“With rising operational costs and better alternatives available, it simply does not make sense to continue offering this service in my store. Given the current economic climate, many small businesses will be forced to reconsider their partnership with Payzone, just as I am doing.”
It was reported in July last year that Payzone has partnered with Strathclyde Partnership for Transport (SPT) to provide easy access to newly modernized ZoneCard tickets for public transport across the Strathclyde region.
The partnership was expected to benefit both retailers and customers, with increased footfall into stores resulting in a boost to local business and community engagement.
Active police response was seen across the country in the past couple of days , resulting in the arrest of alleged thieves targeting convenience stores.
According to local reports, a man has been charged after three convenience stores in Norwich were raided with a crowbar.
The incidents happened at shops in Poringland, Stoke Holy Cross and Sandy Lane, near Trowse in Norwich between Feb 26 and March 19.
Money was stolen in each raid, with a crowbar being wielded. Some of the convenience stores were broken into overnight while others were targeted during working hours.
Jamie Curtis, 31, of Saxlingham Nethergate, has been charged with two counts of robbery and one count of burglary.
He appeared at Norwich Magistrates’ Court on Wednesday and was remanded into custody. Curtis is due to appear at Norwich Crown Court on April 23.
Meanwhile in Colchester, a man has been arrested after being tracked by a police dog from the scene of a knifepoint robbery in Colchester.
Essex Police were alerted to an incident at Johnson Newsagents, a convenience shop in London Road, Lexden, shortly after 11.30am on Tuesday (25).
A man threatened the female cashier with a knife and demanded money from the till. He then left, taking about £200.
Officers were quickly sent to the scene and took a detailed description of the man. The police dog picked up the trail leading officers to arrest the suspect.
A knife was found nearby and was seized. The suspect remains in custody for questioning.
The investigation will now be led by Colchester CID.
Detective Inspector Tim Coyles said, “No one should face the threat of violence whilst simply going to work – and any report made to us concerning this will see a really robust response.
“Officers got there very quickly after the report was made, which meant we were able to very quickly identify a person of interest and ultimately make a key arrest.”
Hamesh Patel, owner of the Johnson Newsagents, said that the cashier was "scared and afraid".
Patel called the response by police "fantastic" and added, "The local community all came together in the search with police within minutes.
"The police sent numerous uniformed police, CID and forensics were on the scene in minutes. I have never seen the police act so fast and they were so brilliant.”