UK Retailers React To Spring Statement 2018
He announced about upgraded projections for growth, predictions of falling inflation, debt and borrowing.
Addressing various issues like facing the retail sector, including business rates, digital tax and measures to reduce plastic waste.
His speech was welcomed by the British Retail Consortium (BRC) chief executive Helen Dickinson and many other retail leaders.
“We’ve consistently called for more frequent revaluations and welcome the Chancellor’s decision to move forward the next revaluation by a year to 2021 as a step in the right direction,” she said.
“More frequent revaluations are no easy task and require strong collaboration and exchange of information jointly between the Valuation Office and ratepayers.”
Altus Group UK business rates president Alex Probyn added: “Three-year revaluation cycles are certainly workable. Whether they are entirely in the ratepayer’s interests depends on the detail.
Undoubtedly a shorter valuation period has benefits in terms of speed at which value changes are passed on to ratepayers and it should avoid the massive step change we saw in 2017. There is inevitable increase in costs in revaluating more frequently.
Any changes must be revenue neutral stated by Government. Those extra costs will be passed to the ratepayer.
The next scheduled revaluation in 2021 will reduce the next step from the five years had been expecting.
The statement on the business rates bill disparities between online retailers and physical stores.
Chairman of the New West End Company, represented areas that are hit hard by business rates in London, Sir Peter Rogers, believes Hammond’s proposals don’t go far enough.
“A year ago, the Chancellor also announced he would examine how online retailing should pay its fair share of local tax and we are still waiting for this,” he said.
The reviews doesn’t go far enough as Britain is alone in relying so much on property tax to fund its council services. It is clearly an outdated system and doesn’t fit for the 21st century.
We urge all parties to consider the matter seriously at wider wholesale reform of local business taxes to ensure that they fair and providing the fund that our vital council services require.
Falling income and increased costs making shops and restaurants to struggle and more number of businesses are closing.
There had a severe knock-on effect across the whole country as retail and restaurant chains look to cut costs elsewhere by the massive 80% rise in business rates in London’s West End.
“It is vital that this tax, which disproportionately hits high street businesses, is now looked at seriously.”
Dickinson echoed Rogers’ calls for reform.
“Given the fundamental questions we now face in a digitally connected and globalised world where tax systems have evolved on a national basis, the government needs to go further than the current business tax road map, published in March 2016,” she said.
“Specifically, there is a need to re-balance away from input taxes (on things like people and property) and towards output taxes (on profits) as well address other underlying problems with the way that different taxes work. This would attract investment which would lead to greater productivity and improved living standards.”
Hargreaves Lansdown’s senior analyst Laith Khalaf believes although Hammond lambasted Labour’s short selling of the UK’s economy is out of “favor” as an investment destination.
“There’s not a great deal of reaction on the stock market, reflecting the stripped-down nature of the statement and the lack of any clear policy changes affecting individual companies,” Khalaf said.
UK is clearly out of favour as an investment destination for both domestic and overseas investors despite the upbeat tone from the Chancellor. Retail investors continue to withdraw money from funds investing in UK shares and preferring international markets.
Current bout of extreme pessimism towards the UK stock market looks overcooked while there are clearly risks to the UK economy.
Many pay a decent dividend and shouldn’t be ignored by investors as UK is home to a diverse range of companies for their money.