The Government has outlined its Autumn Statement, which includes several measures designed to help small businesses, such as independent KBB retailers.
One of the key announcements was a business rates support package, that Chancellor of the Exchequer Jeremy Hunt said will see £4.3 billion allocated over the next five years to help small businesses.
Around 230,000 small businesses in the retail, hospitality and leisure sectors will receive the 75% relief, up to a limit of £110,000 per company, on their business rate bills from next year.
Responding to the news, Tina McKenzie, policy chair at the Federation of Small Businesses (FSB), said: “Business rates are one of the absolute worst taxes faced by small firms. Size matters when it comes to rates, and the Chancellor is absolutely right to have concentrated his firepower on helping the smallest firms at the heart of so many communities.
“By acting to help small businesses with premises through freezing the small business multiplier, the Government has prevented an inflation-linked hike for many of those in the supply chain and other sectors too.”
However, Helen Dickinson, chief executive of the British Retail Consortium, believes the Chancellor hasn’t done enough to support small businesses.
“Retailers and their customers have been sold out by the Chancellor’s statement, which does not do enough to support shops, shoppers, and an industry that employs over three million people, and many more across its supply chains.”
Dickinson explained that while small businesses might benefit from the business rates relief and freeze on small business multipliers, “it does nothing for those retailers that provide the lion’s share of employment, investment, and low-cost essentials for customers. This will lead to inevitable consequences for shops and jobs on high streets, right across the country”.
The British Independent Retailers Association (Bira) expressed both relief and concern at the Autumn Statement. CEO Andrew Goodacre said: “We are delighted to see the 75% discount retained and the small business multiplier frozen – it is a lifeline to so many independent retailers. However, it was disappointing to see the standard multiplier increased by almost 7%. There are many independent retailers who will now be paying more rates next year, as well as paying 10% more on labour.”
Other highlights that will likely impact the KBB industry included a £50 million investment over the next two years for engineering apprentices and what Hunt referred to as “other key growth sectors”.
Chair of the Bathroom Manufacturer’s Association, Tom Reynolds, welcomed the investment opportunities, pointing out that this should have significant benefit for manufacturers.
“It’s important that the conditions are right for firms to put money into kit to make them more efficient and productive. This measure will help and will eventually benefit customers and everyone’s bottom line. We also hope the NI cut will help bring more people into the labour force, as recruitment remains a challenge for all businesses in the sector.
“However, only time will tell whether the autumn statement will do enough to boost consumer confidence given the economic headwinds outlined by the OBR and the overall tax burden which remains at record levels. Confidence has proved illusive during the period of high inflation, but that’s what we need to turn around the KBB sector’s fortunes.”
Additionally, Hunt announced the Government would be cutting the rate of national insurance contributions paid by employees by 2% from January 6, 2024, estimating it would save “the average worker” around £450.
There were further national insurance cuts announced that will help those who are self-employed, such as installers. From April, self-employed workers will no longer have to pay Class 2 national insurance contributions. These are currently £3.45 a week, and have to be paid by all registered self-employed workers earning a profit of more than £12,570 each year.
The Government also announced it will raise the national living wage, and extend full expensing for businesses, which will allow them to deduct investment spending from their profits, allowing them to pay a lower corporation tax figure.