NEWS
‘Much more to be done’ to ensure food & drink sector survives the pandemic Key bodies have called for further support for food retailers who remained open through the winter lockdown but suffered a reduction in income as COVID-19 continued to grip the UK. Chancellor Rishi Sunak announced an extension of business rate relief and the employee furlough scheme in his March Budget, along with fresh loan guarantees and a raft of other measures (see below). However, Andrew Goodacre, chief executive of the British Independent Retailers Association, said Sunak should have gone further to recognise the impact of the pandemic on food firms. Cash grants of up to £18,000 were reserved for companies legally forced to close for the first three months of this year, while full cancellation of business rate bills will only last until June. “All of retail has been
Pictures: HM Treasury
By Greg Pitcher
Industry bodies have called for greater support for food SMEs
disrupted by COVID-19, said Goodacre. “Either by being closed or from lower-thannormal footfall and spending thousands on implementing safety protocols. “We are pleased to see the rates holiday extended by three months, but we do have to realise that for many retailers it will take much longer than three months to rebuild their business, replenish their cash reserves and develop consumer confidence.” Association of Convenience Stores chief executive James Lowman
said he “strongly welcomed” the measures in the Budget. But he added: “There is still much to be done to ensure that the business rates system is both fit for purpose and fairer for all in the long term, so we again urge the government to take long-term action on fundamental rates reform.” He also called for grants to be available to shops that had remained open during the lockdown, saying many essential stores in city centres and other locations had been “severely impacted” by the pandemic.
Seven things the Budget means for fine food firms Business rate relief extended Sunak pledged 100% relief from business rates for eligible retail premises in England from 1 April to 30 June this year. This will be followed by 66% discounts for the next nine months, capped at £105,000 per business for most food firms. Furlough scheme to continue The Budget confirmed that the Coronavirus Job Retention Scheme would carry on until September, with employers to start contributing to the cost of subsidising furloughed staff for unworked hours from July. Further grants for closed businesses Fresh restart grants of up to £18,000 will be available to companies in England forced to close during the latest lockdown. Detail on whether hybrid firms which closed parts of their businesses would be eligible for the cash was awaited as FFD went to press.
New loan guarantees To prompt new lending, from 6th April 2021 the Recovery Loan Scheme will provide lenders with a guarantee of 80% on eligible loans of up to £10 million to UK firms. Sick pay rebate extended Small and medium-sized employers across the UK will continue to be able to reclaim up to two weeks of eligible costs for employee statutory sick pay until further notice. Staggered VAT payments Businesses that deferred VAT payments during the first lockdown can use a new scheme to make payments in 11 instalments rather than a one-off hit as initially planned. Tax relief on investment For two years from 1st April, companies investing in qualifying new plant and machinery are able to claim a “super-deduction” capital allowance that could slash their tax bill by 25p for every £1 spent.
Frankie Dyer, managing director of Barbakan, said discounted business rates and the extension of the furlough scheme would “massively help” the Manchester deli, which has taken a huge financial hit from widespread closures of its wholesale customers. “We sell our own-brand goods to hotels, restaurants and cafes who have all had to shut,” she said. “We have bakers on furlough and fewer vans on the road.” Dyer added that there was more pain in the future for retailers, with Sunak announcing a corporation tax hike from 19 per cent to 25 per cent by 2023. Antonio Picciuto, owner of Hertfordshire-based Buongiorno Italia, said he hoped the Budget would see independent firms through a tough period. “Every little helps,” he said. “I’m pleased that the business rate relief has been extended and the discounted rate will be introduced as it will be a great help in these uncertain times.”
WHAT THEY ARE SAYING ABOUT... THE SPRING BUDGET ANTONIO PICCIUTO, BUONGIORNO ITALIA
I really hope what the chancellor has put in place for small businesses will be enough for survival for those hardest hit. I really believe we have to get to this time next year before there is any certainty that we, as a nation, have come through this. FRANKIE DYER, MANAGING DIRECTOR, BARBAKAN
I am confident our wholesale business will pick up when hospitality opens – our customers can’t wait to open and the public can’t wait to go for a meal. We have moved to local suppliers because of Brexit and I think people will not be travelling this summer and they’ll be supporting local shops. JAMES LOWMAN, ACS CHIEF EXECUTIVE
The upcoming review of business rates will be crucial in shaping economic recovery from COVID-19, and we have long argued for the system to be designed to promote and reward investment. It is therefore encouraging to see the chancellor sharing our focus on promoting investment through his announcement of the new super deduction.
Vol.22 Issue 3 | April 2021
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