In the latest UK Autumn Statement, the government unveiled financial changes with a potential influence on the upcoming general election. Despite a moderate cut in National Insurance for both employed and self-employed individuals, the Office for Budget Responsibility foresees an overall tax increase due to fixed brackets not adjusting with rising salaries.
Concerns linger over a projected 3.5% dip in real household disposable income per person by 2024/25, marking the most substantial drop since the 1950s. On a positive note, consumers could experience increased disposable income with an 8.5% rise in the State Pension and a 6.7% boost in Universal Credit and other benefits. The National living wage is also slated for an almost 10% increase to £11.44 an hour.
An impactful change includes the removal of VAT on period pants from January 2024, aligning with the government’s pursuit of equal taxation on period products.
Business Rates: Assessing the Giveaways and Criticisms
While the government froze business rates for small enterprises for a year and offered a 75% discount up to £110,000 for retail, the response to these measures has been lukewarm.
Frustration looms over perceived inadequate relief, unevenly distributed across the retail sector. Critics argue that capping benefits at £110,000 favors smaller businesses, overlooking financial challenges faced by medium to large enterprises.
Colliers, a prominent property services entity, considers these measures detrimental to the high street, characterizing them as the «final nail in the coffin.» They criticize the Chancellor’s calculation method, potentially resulting in a 60% tax rate on retailers.
Estimates from Colliers indicate substantial rises in rates bills for major retailers, prompting concerns about their impact on high street revitalization efforts.
David Lonsdale, Scottish Retail Consortium director, criticizes the Chancellor’s decision not to freeze business rates, anticipating a £540 million hike for medium to large retailers, impacting workers and shop prices.
In summary, the Autumn Statement has evoked diverse responses, with viewpoints ranging from positive to critical regarding its implications for businesses and consumers. The effectiveness of these fiscal maneuvers remains a debated topic within the UK’s economic landscape.