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Budget 2021 predictions: Retail & Wholesale

retail store graphic on yellow background

It has been a tumultuous past year for retail and wholesale companies. Whilst many ecommerce businesses have flourished, non-essential stores have continued to suffer and now, more than ever, Retail & wholesale companies need support in the short term to cope with the impact of both the pandemic and Brexit.

We do not necessarily expect to see any significant changes announced in the March Budget but would welcome positive changes in the following areas;

BUSINESS RATES

Physical stores are at an increasing disadvantage compared to online stores and now face the challenge of luring consumers back to stores who may have spent months buying all their products online. The business rates system needs to be made fairer long-term but physical stores also need some relief from this year’s rates and we would welcome a gradual re-introduction as the nation hopefully starts to return to normality.

ONLINE SALES TAX

There has been much talk of an online sales tax and whilst we believe the balance between taxation of physical and online stores needs to be addressed, just adding an additional tax burden solely on online business is not a long term answer. This needs to be carefully thought through, ideally through a coordinated international strategy.

INCENTIVES TO RETURN TO STORES

When it is safe to do so, we would welcome any incentives which would help attract customers back to physical stores. A reduction in VAT or any other relief for physical stores which would help them build back consumer confidence would provide a significant boost.

This is a critical time for many retail businesses who have only managed to survive in the last year due to the government incentives provided. The re-opening and return to normality will take time and pulling the rug on all these incentives will see an increasing number of business failures and redundancies

Coronavirus Job Retention Scheme

With the Furlough scheme due to finish at the end of April 2021, we are hoping that the chancellor decides to extend the scheme further given the uncertainty on when the high streets will re-open.  The retail sectors has been one of the main benefactors of the scheme and retailers will hope this support from the government remains in place until such time that some level of normality returns.

Retail eviction moratorium

Similar to the CJRS the moratorium has been extended to 31 March 2021 and also similar to the CJRS we would like to see this extended into the future to provide retailers with the support they need to help them recover from the impacts of the pandemic and plan for the future.  There is also an expectation that if the moratorium is extended past 31 March 2021 then the ban on landlords using bailiffs to enforce unpaid rent on these commercial leases is also expected to be extended, and again this will be welcomed by retailers.

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