Alcohol & Health
In case there was any doubt, the Chancellor has nailed his colours firmly to the mast on the issue of the price of booze. The days of the government planning to bring in minimum pricing (was it really only two years ago?) seem very distant indeed.
A third successive cut in beer tax, cider tax also down and wine duty frozen (although not cut as the industry would have liked), have all seen cheers for George ring out across the alcohol industry.
What will be fascinating now if the government continues to take the same stance on the growing calls, including from within the DH itself, for taxes on products such as fizzy drinks that are high in sugar. A look at how it has turned against anything which might be perceived as “nanny state” would suggest that The Treasury will strongly resist any calls from Public Health England, which is currently investigating a sugar tax.
So far the signs are that Labour is also loath to risk upsetting taxpayers, which leaves health campaigners at real risk of being left banging at a closed door on both sides of the house. Ian Quinn
Fresh Foods
It is great news that George Osborne is granting the National Farmer’s Union request to allow farmers to average out their income over 5 years for tax purposes.
UK farmers currently suffer from significant swings in profitability as a result of fluctuating commodity markets and changeable weather conditions, with dairy and beef producers particularly vulnerable to profit volatility.
The NFU has long argued that extending the tax average period from two to five years will give farmers additional security and lessen the turbulence in farm business. It will also bring UK dairy farmers in line with their competitors in Ireland, who can already average their tax over 5 years.
This should in turn help stabilise supply of British produce, with obvious benefits for UK consumers, 78% of whom want to see more food from British farms on supermarket shelves. Carina Perkins
Taxes & Spending
As might be expected with an election just weeks away, George Osborne’s sixth budget was heavy on the political rhetoric and fairly light on firm policy commitments. Away from the booze duty cut, there wasn’t too much to cause mass celebration of gnashing of teeth for companies across the grocery industry.
The widely expected one percentage point cut in corporation tax to 20% in the coming financial year will be welcomed – as will the easing of pressure on consumer spending power by the raising of the personal tax-free allowance to £10,800 next year and £11,000 thereafter.
However, there will be some disappointment that the Chancellor didn’t do more than briefly mention the already announced review of business rates. Alec Mattinson
Wholesalers
”This country’s tolerance for those who will not pay their fair share of taxes has come to an end,” Chancellor George Osborne declared in today’s Budget. He’s not wrong. Duty evasion on beers, wines and spirits alone costs the Treasury £1.3bn a year in lost revenue. And duty fraud is an issue that wholesalers have been urging the government to tackle for a long time.
They got their wish today when the Chancellor confirmed the Alcohol Wholesaler Registration Scheme, first announced in the autumn statement of 2013, will come into effect from October. The scheme will be included in this year’s Finance Bill, which means wholesalers will have to prove, through stringent tests and due diligence of their suppliers, they are trading legally - or risk going out of business.
As FWD CEO James Bielby succinctly put it: “The clock is ticking for alcohol duty cheats.”
The key now will be whether the scheme lives up to its billing – how it is interpreted by the sector, and how tough the HMRC’s crackdown will be on illegitimate traders. You can be sure the sector will be keeping a close eye on its effectiveness. Beth Brooks
Rates review
On top of this week’s launch of the review of business rates, Osborne has accelerated the potential move towards a much more devolved system of government taxation of businesses in England. As an example, “northern powerhouse” Manchester is to be allowed to keep 100% of growth in business rates.
This has the potential to be a double-edged sword for retailers. Whilst those who accuse the government of allowing northern towns and cities to rot while the south prospers will be pleased at the prospect of more local powers, more local control for councils is hardly an incentive for authorities to agree to the reduced rate burden so desperately need by the businesses on the front line. Ian Quinn
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