The Association of Convenience Stores (ACS) has welcomed the first Budget of the new Coalition Government.
In response to the Chancellor announcing an increase in VAT to 20% from 4 January 2011, ACS chief executive, James Lowman, said: “The much expected rise in VAT may be the least bad option for increasing tax revenue, but it does present a risk to local shops. It’s a great relief that the Chancellor has listened to us and not extended VAT into areas like food and newspapers, such a move would have dramatically increased the cost of goods in convenience stores.
“We also warned the Chancellor not to implement the increase in VAT immediately as this would not allow retailers enough time to change prices on thousands of products. The delay also allows retailers time to sell through products with price marks and avoids the previous error of introducing the change on the 1 January.”
The Chancellor also announced reductions in taxes and national insurance contributions for small businesses. Cuts have been announced in the rate of corporation tax of 1% per year from 2011 to 2014; a reduction in the small business rate to 20% from April 2011 and a reduction in National Insurance Contributions for businesses outside of London and the south-east of up to £5,000.
Lowman said: “Local shops welcome the decision to reduce corporation and small business taxation, and the increase in the thresholds for employer national insurance contributions.
“These tax reductions will leave retailers better equipped to deal with the challenge of economic recovery, and will stimulate new employment in the sector.”
Source: Association of Convenience Stores (ACS)
