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March 17, 2016 / Apley Estate - Hamiltons

How the latest budget may affect farm shops

2016-03-16, Sugar tax imageGeorge Osborne has delivered his eighth Budget yesterday, 16 March.  He has delivered a cut in corporation tax, retained and extended Small Business Rates Relief, and frozen fuel duty. But has also introduced a tax on sugary drinks, and the Office for Budget Responsibility says the overall tax burden is rising. The editor of the Fine Food Digest (published by the Guild of Fine Foods) asked GFF members for its likely impact on the Fine Foods sector – whether it will help or hinder Fine Food businesses. I handed over to Gavin, being an accountant by training whose reply was:

  1. The increase in the threshold for not paying business rates to £12000 rateable value is very welcome & will assist many independent shops & producers.
  2. This is particularly welcome because the incoming Living Wage increases will increase costs dramatically & will reduce the viability of food & service businesses who have to employ significant staff numbers & may not be able to pass the cost on.
  3. The reduction in Corporation tax is positive, but the Chancellor will have his pound of flesh [he’ll recover that] when profits are taken out of the business [by business owners to pay themselves]
  4. Hopefully the sugar tax will not affect independents. However, we all have to look out for the effect of new nutrition labelling requirements coming in later in 2016 which could make small product runs unviable.

We’ll be monitoring the situation carefully …

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