What does the 2023 Spring Budget Mean for Retailers?

The Chancellor Jeremy Hunt has delivered a “Budget for growth”, which intends to deliver long term sustainable growth for the UK with four key priorities: employment, education, enterprise and everywhere. With the forecast for the UK economy suggesting that a recession will be avoided, the actions from the Spring Budget promise support to people amid the cost-of-living crisis, bringing down inflation and providing economic growth.

Here’s what the Spring Budget means for retailers:

Energy Price Guarantee

Increasing energy prices are a big pressure point for households and businesses alike. The government’s delay of increasing the energy price guarantee for the next three months could help free up disposable income that could be spent in retail.

In addition to this, businesses will continue to benefit from discounted wholesale prices of gas and electricity rather than a fixed price. The Energy Bills Discount Scheme (EBDS) replaces the Energy Bill Relief Scheme (EBRS) from 1st April and it’s worth noting that government funding for this support scheme, running until March 2024, is significantly less than the previous scheme.

Nevertheless, retailers with a higher energy usage will benefit from a larger relative discount using the Energy Bills Discount Scheme than retailers with a lower usage.

Free childcare for under 3s

The government is set to provide a boost to parents in the workforce by removing one of the biggest hurdles to their employment through a significant increase in accessible free childcare.

By disbursing over £4.1 billion by 2027-28, working families with children aged 9 months to 3 years in England will now have access to 30 free hours of childcare each week, thereby aligning with the existing 30 hours offer for 3 to 4 year-olds.

This will effectively bridge the gap between the end of parental leave and the commencement of the free childcare hours offer. Consequently, parents can resume work earlier to help with family support and career advancement.

With UK childcare costs amongst the highest in the world, the move could get more parents back to work and boost the talent pool in the retail sector.

Affordable beer in pubs

From August, alcohol duty rates will rise by 10.1% in line with the Retail Price Index, but pubs will be shielded from the impact. The ‘Brexit Pubs Guarantee’ will ensure that draught beer in pubs will be 11p cheaper than beer in supermarkets, which will support the struggling hospitality sector with pubs and restaurants set to benefit.

Artificial intelligence development

A new AI sandbox will launch to trial faster approaches to help innovators get cutting-edge products to market. The government will commit £900m of funding to implement “exascale computer” and £2.5bn for researchers and academics in quantum computing to improve the country’s competitiveness in the field.

Tax Allowances for Business Investment

The Chancellor revealed that every pound spent on IT, plant and machinery can be deducted full value from taxable profits for the next three years. This generous move is set to give business investment a boost in the short term and translates to a corporation tax cut worth £9bn a year.

If you are considering an investment in your IT, at RMS, we offer expert advice to choose the best EPoS Retail Management Solution for your retail business. We have extensive knowledge of the retail sector and we know how to drive your business forward.

What was missing?

The Chancellor missed an opportunity to look again at Sunday trading hours and help address some of the damage done by the introduction of VAT on spending by international visitors, according to the New West End Company CEO Dee Corsi.

The Chief Executive of the British Retail Consortium, Helen Dickinson states: “The broken Business Rates system remains a drag on business investment, jobs, and economic growth. Rates must be paid in full whether firms are making a profit or a loss. This makes Business Rates the final nail in the coffin for many struggling stores; shutting shops, costing jobs and preventing new stores openings.”

Conclusion

The Spring Budget delivered by the Chancellor brings some positive news for retailers with various measures aimed at promoting long-term sustainable growth in the UK economy. The energy price guarantee delay and free childcare for under 3s will provide a much-needed boost to working families, potentially increasing the retail talent pool. Additionally, deductible IT spending, AI development funding, and affordable beer in pubs will support the growth of businesses in the retail sector.

Despite these measures, some industry leaders suggest further improvements such as addressing business rates and revisiting Sunday trading hours, which remain a drag on the sector. Overall, the budget promises to provide support to the retail sector, laying the foundation for long-term growth in the future.

Why choose RMS?

In light of the Spring Budget, our meticulous approach to your EPoS system allows us to plan and set up your EPoS equipment in the most cost effective and efficient way. With minimal disturbance to your everyday business operations, complete EPoS solutions such as OpSuite can start delivering results immediately. Of course, we don’t expect you to master your new equipment and software without some help and guidance. This is why at RMS, we offer workshops, training sessions, and UK-based customer support to help you get to grips with the fundamentals of your new EPoS system.

RMS have worked with ambitious businesses for over 18 years, supplying tailored software solutions and EPoS hardware from the Shetland Islands to the Seychelles. We work with businesses in most retail verticals, so get in touch to find out how our retail solutions can benefit your business, or to speak to one of our team call 0800 138 0050.