Some relief for SMEs and retailers as Osbourne eyes growth.
Chancellor George Osbourne announced a raft of measures designed to stimulate the business and economic environment when he delivered the Budget.
The changes he unveiled look set to have implications for all areas of the watch and jewellery industry, especially small businesses operating in the wholesale and retail end of the market.
One of the headline measures was the decision to scrap both the 1p increase in fuel duty and the fuel duty escalator, as well as reduce fuel duty immediately. This will bring some relief to watch and jewellery suppliers that are either suffering high transportation bills or were worried that logistics providers would pass rising costs onto them.
The move is also expected to give much-needed help in tackling inflation, although higher than expected CPI inflation of between 4 percent and 5 percent is still expected in the short term.
Osbourne also revealed that the government plans to reduce the main rate of corporation tax over the next three years, taking it from 28 percent to 26 percent from April 2011. However, it did not mention how the small business rate of 21 percent would be affected.
There was also good news for those at the innovation end of the watch and jewellery industry, with news that the Enterprise Investment Scheme has been extended and Entrepreneurs Relief has been doubled to £10 million. Experts believe that move will provide a shot in the arm for entrepreneurship in the UK.
For small independent watch and jewellery retailers struggling with inflation and other VAT rises, meanwhile, the extension to Small Business Rate Relief for properties with a rateable value below £6,000 should provide assistance. The Small Business Rate Relief will run for another year from October 1.
The Federation of Small Businesses (FSB) welcomed announcements in the Budget which will help provide stability, but said it “didn’t go far enough” to incentivise job creation. According to the FSB, a three-year moratorium on new regulation for micro-firms — which is designed to encourage employment growth — should have been extended to small firms to make it more attractive for them to hire more staff.