Spending Review - retail groups concern over apprenticeship and rates

Retailers will lose out after the Autumn Spending Review through increased apprenticeship levy and business rates costs.

Image: HW

The Chancellor used his joint Autumn Statement and Comprehensive Spending Review to announce that the year-long review of the outdated business rates system will be extended with its report now expected at the March 2016 Budget.

Apprenticeship levies announced in the Review mean larger British retailers will pay 0.5 per cent of a company’s payroll from April 2017. The cost equates to almost the same amount as the new living wage, according to Resolution Foundation. Only businesses with a wage bill of more than £3m will pay the levy.

The British Retail Consortium (BRC) said that the rate rises combined with the additional costs of the new National Living Wage, announced in the 2015 Budget, and the apprenticeship levy would mean retailers have to find an extra £14bn over the next five years.

The Institute of Directors said the apprenticeship levy would be a big cost for many companies, including medium-sized firms.

The CBI said it was a significant extra tax for business that would hit many smaller companies.

Meanwhile, the Chancellor extended the business rates relief for small businesses for another year.

The scheme, which excludes business rates on properties valued at £6,000 or less, is estimated to support around 600,000 small and medium-sized companies across the UK.

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