Menzies’ Spring Budget wish-list and recommendations for the retail sector

Martin Hamilton, director and retail sector specialist at Menzies, the accountancy and strategic advisory firm, has issued the following wish-list items/recommendations.

• Business rates – Modify the scheduled business rates increase in April by transitioning from the Consumer Price Index (CPI) of September 2023 to the projected CPI of April 2024.  Such an increase could see high streets shops business rate bills increase up to £1.92bn.  Such an increase will undoubtedly put further pressure on consumer prices.
• Tax-free shopping – Acknowledging the crucial role played by the retail sector in the UK’s economic landscape, we propose the reintroduction of tax-free shopping for international visitors, including those from the EU. By reinstating this initiative, we anticipate a significant increase in tourist expenditures, ultimately restoring the UK’s competitive advantage when compared to other European nations.
• VAT relief on product donations to charities – We propose expanding VAT relief to include direct product donations to individuals and households, intending to encourage philanthropy and cultivate a circular economy. We foresee that this modification in policy will not only strengthen assistance for those in need but also motivate retailers to actively engage in community welfare initiatives.
• National Living Wage – Exercise prudence in determining the National Living Wage for 2024/5, following a sustainable trajectory that aligns with broader economic conditions. This approach will empower the Low Pay Commission to provide independent recommendations based on the evidence presented.
• Clean energy – Promote investment in renewable and energy-efficient projects by offering fiscal and financial incentives, such as the extension of full expensing of capital allowances beyond March 2026