Review of Budget 2010: Implications for the retail & leisure sector
For businesses, the budget sounded better than it read.
While on the one hand there were measures to please small business owners - so frequently regarded as the key to the UK climbing out of recession - such as £41bn in bank lending, temporary rate relief, a 2.5bn ‘growth package’ and no increase on VAT. On the other, pre-announced increases to National Insurance Contributions and the minimum wage, the latter hidden in the detail of the budget, will hit businesses of all shapes and sizes.
The Small Business Rate Relief has been cut for one year from October but only for a minority. Crucially, only small businesses occupying properties with rateable values up to £6,000 will be eligible.
A new adjudication service to judge bank lending to small businesses will be established and a new investment corporation ‘UK Finance for Growth’ will streamline Government support for SMEs, including a new Growth Capital Fund, devoted to providing fast-growing companies with private capital.
A £2.5 bn one-off package for small businesses will be established with the ambition of boosting skills and innovation. Relief on Capital Gains tax for entrepreneurs will be doubled.
These measures will sit alongside an agreement the Chancellor has come to with Lloyds and RBS, that £41bn will be made available to small businesses.
National Insurance Contributions (NICs) will see a 1 per cent increase from April 2011. The Minimum Wage will also be increased by 2.2% as of October 2010.
For the leisure industries there is little to smile about. A 2p increase in alcohol duty will come into effect as of midnight on Sunday. This will be increased by 2% above inflation each year until 2014/15. Hitting happy hour even harder will be a 10% increase on cider duty above inflation.
Our other 2010 Budget reviews
