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Ensuring a sustainable and prosperous convenience industry in Scotland

Chancellor Rejects Retailers Pleas Over 17.5% VAT Reinstatement

The Scottish Grocers’ Federation (SGF) has expressed disappointment at the Chancellors rejection of calls by the retail sector to delay the reinstatement of the 17.5% VAT to February 2010.

John Drummond, Chief Executive of SGF said:

“Retailers are disappointed the Chancellor has ignored their pleas to delay the reinstatement of the 17.5% VAT rate. The timing of the VAT increase, on the 1st January, represents the busiest trading period for retailers. In addition, both the 1st and 2nd of January 2010 are bank holidays in Scotland, when retail businesses are working with restricted staffing levels due to holidays. Applying these changes will increase costs and the level of administration for retailers at the worst possible time.

“Increased employment costs are one of the biggest threats for small shops. Raising national insurance contributions will undermine retailers ability to provide jobs in communities across Scotland.

“The Chancellors decision not to readjust the duty rates which were increased in 2008 to account for the decline in VAT is damaging both to consumers and retailers.

“Deferring the planned 1% rise in corporation tax will provide some welcome relief in amongst a report which does little to boost business for convenience store retailers.”