“Uncertainty” for wholesalers following budget announcement
Only time will tell how effective measures introduced as part of the government’s budget will be according to FWD.
While the federation said the industry welcomed certain points of Chancellor Rishi Sunak’s budget, external factors such as coronavirus and ongoing Brexit uncertainty will probably be the deciding factor on how successful they’ll be.
Despite positivity on issues surrounding fuel duty, infrastructure and business rates, FWD has also highlighted potential issues for wholesalers, including the increase in the National Living Wage and a plastic tax.
“The spread of Covid-19 and the UK’s imminent departure from the EU overshadow this budget and will dictate how effective the chancellor’s support for wholesalers and their customers will be,” said FWD Chief Executive James Bielby.
“The freeze on fuel duty, investment in infrastructure and business rates support are very welcome. The chancellor has listened to hauliers who use refrigerated transport and delayed a tax on red diesel for two years.
“Other measures, including the rise in the National Living Wage
and the introduction of a plastic tax, will potentially have major consequences for wholesale and FWD will be working closely with government on how far and how fast changes are implemented.
“Our members supply and support 400,000 businesses of all sizes and we welcome any measures to help them through this challenging period. However, with economic growth downgraded to 1.1% and the impacts of Brexit and Covid-19, this sector and many others face an unprecedented period of uncertainty.”
Budget 2020: Key announcements for wholesalers
National Living Wage
• Beer, wine and cider duties are all to be frozen this year, as is fuel duty.
• Duty rates on all tobacco products will increase by RPI + 2% until the end of this Parliament. The rate on hand-rolling tobacco will increase by RPI + 6% this year.
• The entitlement to the use of red diesel (used in refrigerated transport) will be removed from 2022 but the Government will ‘consult on whether the entitlement to use red diesel and rebated biofuels is justified for any other users’
• The National Insurance Contributions threshold will rise from £8,632 to £9,500
• The National Living Wage will reach more than £10.50 an hour by 2024.
• Plastic packaging tax will come into force from April 2022
• Significant spending on infrastructure and roads.
In terms of economic growth, expectations have been downgraded from 1.4 to 1.1%.