Government should defer tax and VAT liabilities for the retail sector

The UK Government should defer tax and VAT liabilities for the retail sector , and extend the current one-year business rates holiday.”

Daniel Burke, an Audit and Assurance Partner at the firm said :The government announcement to ban social gatherings of more than 6 people from 14 September will have a big impact on the retail sector.

Daniel added that “125,000 jobs have already been lost in retail in 2020 according to the Centre for Retail Research. In order to avoid increased job losses, the Government needs to introduce sector specific support measures.”

“The furlough scheme needs to be extended. The UK Government should help avert impending cashflow issues which will hit early next year by further deferring tax and VAT liabilities for effected sectors, whilst also extending the current one-year business rates holiday.”

Daniel said “It could be disastrous for the retail sector over Christmas if the new ‘rule of 6’ doesn’t change, especially grocery shops which rely on people spending for large parties and family celebrations. Many food retailers and grocers have already forward ordered based on a loosening of restrictions. Those businesses run the risk of having incurred costs and could now find this investment wasted. With most retailers reliant more than ever on the prospect of a good Christmas to offset the losses from earlier in the year, this may well sound the death-nell for many retailers.”

Daniel said: “ Coronavirus is continuing to have a devastating effect on our economy. You only need to walk through Central London, and you can see retail stores, coffee shops, pubs and restaurants that are closed. These businesses have already suffered severely with little or no income for the last six months.”

He added “Sector specific support is needed, and it is needed now. The current Loan Schemes and the Job Retention Scheme all cease in the next 2 months and it is now clear that this downturn will be here for very much longer.”