The headlines are rightly on the increased tax burden from the increase in NI contributions in conjunction with NLW increases – and in a sector with millions of employees that cost will be huge and no doubt one we as consumers will need to meet, but lots of other topics that will impact the consumer/ retail / food / hospitality sector. ??What may appear to be a win from one narrow point of view is likely to see business worse off overall.?
?There is a lot of detail to get into here and one things is for sure, based on recent news it could have been worse. ?To help you pick out some of the key points, my key take aways from the official budget report are below, issues include rates relief, sugar tax, PPT,? vaping products duty to name but a few:
- For 2025-26, eligible retail, hospitality and leisure (RHL) properties in England will receive 40% relief on their business rates liability. RHL properties will be eligible to receive support up to a cash cap of ￡110,000 per business.? Great news for the sector on an evergreen issue, though the cash cap for each business will render the change next to pointless for any business of scale.
- The government intends to introduce permanently lower multipliers for Retail, Hospitality and Leisure (RHL) properties from 2026-27, paid for by a higher multiplier for properties with Rateable Values above ￡500,000 (almost all supermarkets for instance)
- Carbon Border Adjustment Mechanism: government response publication – The government has published its response to the March 2024 consultation on the introduction of a UK carbon border adjustment mechanism (CBAM). The response confirms that the UK CBAM will be introduced on 1 January 2027, placing a carbon price on goods that are at risk of carbon leakage imported to the UK from the aluminium, cement, fertiliser, hydrogen and iron & steel sectors. Products from the glass and ceramics sectors will not be in scope of the UK CBAM from 2027 as previously proposed. The registration threshold will be set at ￡50,000, retaining over 99% of imported emissions within the scope of the CBAM, while removing over 80% of otherwise registrable businesses. Over 70% of those removed from the CBAM altogether by this threshold are micro, small, or medium sized businesses.? – one that will grow in significance over the next 12 months.
- Climate Change Levy main and reduced 2026-27 rates – The main rates of the Climate Change Levy (CCL) for gas, electricity, and solid fuels will be uprated in line with Retail Price Index (RPI) in 2026-27. The main rate for liquefied petroleum gas will continue to be frozen. The reduced rates of CCL will remain at an unchanged fixed percentage of the main rates.
- Carbon Price Support 2026-27 rates – The government will maintain Carbon Price Support rates in Great Britain at a level equivalent to ￡18 per tonne of CO2 in 2026-27.
- Competition and Markets Authority Road Fuels Monitoring Function – The government is aiming to commence the Competition and Markets Authority’s information gathering powers in the Digital Markets, Competition and Consumers Act 2024 by January 2025 so that it can monitor competition in the market.
- Plastic Packaging Tax rates – To incentivise businesses to use recycled instead of new plastic in packaging, the government will increase the Plastic Packaging Tax (PPT) rate for 2025-26 in line with CPI inflation.
- Plastic Packaging Tax – Mass Balance Approach: Publication of the Summary of Responses – To support use of and investment in advanced chemical recycling technologies, businesses will be permitted to use a mass balance approach to evidence recycled content in chemically recycled plastic for PPT.
- Alcohol duty – The government will support pubs and the wider on-trade by cutting alcohol duty rates on draught products below 8.5% alcohol by volume (ABV) by 1.7%, so that an average ABV strength pint will pay 1p less in duty. The government will also increase the discount provided to small producers for non-draught products, and maintain the cash discount provided to small producers for draught products, increasing the relative value of Small Producer Relief. Alcohol duty rates on non-draught alcoholic products will increase in line with RPI inflation. These measures will take effect from 1 February 2025. The current temporary wine easement will also end as planned on 1 February 2025. 5.99 Guest beers consultation – The government will consult on ways to ensure that small brewers can retain and expand their access to UK pubs, and maximise drinkers’ choice, including through provisions to enable more ‘guest beers’.
- Spirit Drinks Verification Scheme investment and consultation – The government will consult with industry to improve the Spirit Drinks Verification Scheme (SDVS) and make an investment of up to ￡5 million to support the SDVS.
- Alcohol Duty Stamps Scheme: Abolition – The Alcohol Duty Stamps scheme will end following a review by HMRC. The government will introduce legislation in Finance Bill 2024-25 to end the Scheme from 1 May 2025.
- Soft Drinks Industry Levy – To protect its real terms value, the Soft Drinks Industry Levy (SDIL) will be increased, over the next five years, to reflect the 27% CPI inflation between 2018 and 2024. Annual rate increases will take place on 1 April, starting on 1 April 2025, and will also reflect future yearly CPI increases.
- Soft Drinks Industry Levy Review – To ensure the SDIL continues to encourage reformulation to help tackle obesity, the government will review the current SDIL sugar content thresholds and the current exemptions for milk-based and milk substitute drinks. Contributions from all interested stakeholders are welcomed as part of this review.
- Tobacco duty rates – The government will renew the tobacco duty escalator at RPI+2% on all tobacco products until the end of this Parliament. To reduce the gap with cigarette duty, the rate on hand-rolling tobacco will increase by a further 10% this year. These changes will take effect from 6pm on 30 October 2024 and will be included in Finance Bill 2024-25.
- Vaping products duty – A flat-rate excise duty on all vaping liquid will be introduced from 1 October 2026 at ￡2.20 per 10ml vaping liquid, accompanied by an equivalent one-off increase of ￡2.20 per 100 cigarettes / 50g of tobacco in tobacco duty to maintain the financial incentive to switch from tobacco to vaping
