Against a backdrop of politcal unrest over Brexit and a sluggish economy, this year’s Budget is set to be dominated by gloomy economic predictions and further spending cuts. Chancellor George Osborne has previously spoken of the need to find another £4bn of spending cuts to stick to his plans. Ahead of the his eighth Budget on Wednesday, we take a look at what retailers should expect.
Increases in the national minimium wage
The chancellor has already revealed the new levels of the national minimum wage. For 21- to 24-year-olds it increases from £6.70 to £6.95 an hour, while 18- to 20-year-olds will enjoy a rise from £5.30 to £5.55 an hour. For 16 to 17-year-olds it will rise from £3.87 to £4 an hour, while apprentices take home an extra 10p per hour to £3.40 an hour. From April, workers over 25 will receive a living wage of £7.20 an hour, which was announced last year.
Update on business rates consultation
The chancellor is expected to reveal the results of the business rates review on Wednesday. Tesco chief Dave Lewis has warned the government that if it does not revamp the current system, it could result in major retail losses. But business rates expert Paul Turner Mitchell anticipates the review will be a “damp squib”. “It is likely to focus primarily on the ‘devolution revolution’ agenda which is simply code for how councils are funded moving forward. Councils have made it clear they want to maintain the status quo in terms of the current system to keep the certainty in terms of their finances. The review is likely to appease councils rather than be bold reforms business have been crying out for.”
A crackdown on tax evasion
Osborne is likely to be reveal further measures for tackling tax avoidance by large businesses who deliberately evade tax by channelling money into offshore accounts. It is thought that he may also look to increase transparency in this area by pushing companies to publish their tax strategy.
Changes in tax rates
The chancellor has reiterated that the Conservatives made a promise to the British people on tax cuts, and it’s thought he may look to do this by raising the threshold at which people are brought into the 40p tax rate. On the other side of the coin, he could also increase the personal allowance rate at which people start paying tax by £300, edging it closer to the £12,500 target by 2020.
Fuel duty prices
It’s likely delivery drivers will face higher prices at the pump, as Osborne is expected to increase fuel prices.