BikeBiz Bicycle and cycling retail news
Today’s Autumn Budget Statement tackled business rates, roads and fuel duty:
Business Rates
- The so called "high street discount" for 300,000 shops, pubs, cafes and resturants will rise from £1,000 to £1,500 from April 2015 to March 2016.
- Small Business Rate Relief will be doubled for a further year, so 380,000 of the smallest businesses will pay no rates at all, according to the Treasury.
- The annual increase in business rates will be capped at 2% from April 2015 to March 2016.
Roads and infrastructure
The government is spending big on roads – £15 billion. As we revealed last week, there’s £214m being spent on cycling, including £114 million for eight English cities and a further £100 million to be spent over the next six years on roads. Notably, that figure falls well short of a commitment to spend £10 per person for the immediate future, one of the key demands in the Get Britain Cycling report.
Fuel Duty
In a move likely to infuriate many advocates (who might question why the government is subsidising motor traffic at at time when the nation’s bulging waistline is costing £47bn a year) fuel duty is not rising. You probably won’t hear many bike distributors (or shops) complaining as it won’t mean it costs them more to transport goods. With the price of oil down it might have been an ideal opportunity for Osborne to put a few pence on the litre, but what do we know?
Sustrans Policy Director Jason Torrance said: “It’s disappointing that the Chancellor has frozen fuel duty yet again – this decision does nothing for the 25 per cent of households without access to a car and fails to provide any viable alternatives for those already struggling with the cost of driving.
"Couple this with a £24 billion road building agenda that will inevitably increase congestion and we are sadly no closer to providing a national solution for car dependency and the lack of travel choice people experience every day.
“Dedicated investment in walking, cycling and public transport will deliver growth without gridlock, while easing the impact of congestion, air pollution and the physical inactivity crisis.”
Tax avoidance
It’s hard to know to what degree this one affects the cycle trade, but the government is clamping down on tax avoidance by multinational companies, notorious examples of which include Google and Amazon (the latter stocking over 55,000 different cycle accessories alone).
The Treasury statement said: "Currently some large multinational companies divert profits abroad through complicated business structures, such as the so-called ‘double Irish’, in order to avoid paying taxes. The government is introducing a new tax to counter this.
"The ‘diverted profits tax’ will apply to a company’s profits that have been diverted from the UK through complex arrangements such as these, and will apply to both UK and foreign multinational companies.
"So if a company conducts a lot of activity in the UK – sales, for example – but can avoid paying corporation tax by moving profits generated in the UK to other countries through the manipulation of the international tax rules, the UK will now be able to tax those profits at a rate of 25%. This will be introduced from April 2015."
‘A Northern Powerhouse’
£7 billion has been announced to build a ‘Northern Powerhouse’, most of which will go on roads (£6 billion) – "to reduce jams, introducing new modern trains and 20% more capacity to end overcrowding, developing HS3 to make east-west travel faster, and doubling the number of northern cities to benefit from the government’s superfast broadband programme".
