The Autumn Statement delivered last week by Philip Hammond was notably muted and has left retailers questioning whether, this year, they have been 'naughty or nice'. In stark contrast to George Osborne's tendency to pull a rabbit or two out of the hat, Hammond preferred to quietly leave a small lump of coal at the bottom of our stockings - most likely in response to the gloomy economic forecast.
Transitional rates relief benefits businesses affected by a change in the rateable value of their property by capping their business rates to allow a more gradual change. Although rates under the relief are being reduced in 2017 (and further in 2018), businesses can still expect to pay £550m more in rates next year than they pay today (Source: British Retail Consortium Chief Executive, Helen Dickinson). Hammond announced a £6.7 billion business rates package for small businesses. This will help small businesses considerably in reducing their tax bill but is unlikely to prompt medium or large retailers to join the Chancellor under the mistletoe.
The National Living Wage increase from £7.20 to £7.50 per hour will give Christmas cheer to certain workers over the age of 25 with the promise of what amounts to around £600 per year in their pockets. Whilst this allows Mummy and Daddy to be a little more generous in their present-giving this festive season, the 4% increase will put extra pressure on retailers already faced with burgeoning costs. When this is combined with the new levy on UK employers to fund new apprenticeships and the drop in value of the pound, retailers may need extra mulled wine to seek solace this Christmas."