Stores are braced for a raft of legislation coming into effect this week from October’s Autumn Budget. However, some retailers were unaware of less publicised law changes.
A new survey of 269 shop owners by the Fed revealed a “bleak outlook”, with more than half of stores planning cuts to staff and/or staff hours. Eighty percent of shop owners are planning to take on more hours themselves.
Despite widespread knowledge of the major wage cost rises, Better Retailing heard reports of stores being caught out by lesser-known changes this week. See below for the full list of measures affecting convenience stores.
What are the changes to recycling and landfill tax?
Shops with 10 or more full-time employees must now split out “dry recycling”, paper and card, food waste and “black bin waste” and use a licensed waste carrier for collection.
The standard rate for general and mixed waste has risen by 21% to £126.15 per tonne. Many suppliers such as Biffa have already increased their prices accordingly.
How much has the soft drinks industry levy risen?
The sugar tax on drinks with 5-7.9g sugar per 100ml has increased by 1.4p to 19.4p. The charge on drinks with higher sugar rose by 1.9p to 25.9p. Wholesalers warned some suppliers, including CCEP, responded by squeezing store margins on price-marked lines.
What are the staffing law changes affecting retailers?
From 6 April, the weekly statutory sick pay rate will increase by £2 to £118.75. Minimum redundancy caps, maternity and paternity pay and unfair dismissal caps will also increase.
Employers now pay 15% National Insurance contributions, up from 13.8%. Stores will also have to pay employer contributions on any part-time working above eight hours per week as the annual pay threshold has decreased from £9,100 to £5,000.
This week’s only good policy news for stores is the doubling of the Employment Allowance, meaning stores will not have to pay NI contributions on the first £10,500 they are due to pay each year.
The new National Living Wage brings 16-hour staff above the £10,000 income threshold for employers to contribute to pension for the first time. At 3% contribution, this will cost stores £305 extra a year.
What are the changes to law on business rates and the National Living Wage?
Some stores in England saw a 140% Business Rates bill rise this week due to the Retail Leisure and Hospitality Rate Relief falling from a 75% to 40% discount.
A store with a £20,000 rateable value will now pay £5,988, up from £2,495.
Shop owners selling up face higher Capital Gains Tax bills due to changes in Business Asset Disposal Relief. The tax on profits from asset sales has increased from 10% to 14%. Another rise to 18% is due in April 2026.
Staff aged 21 or over must now be paid £12.21 per hour, a 77p rise. Those aged 18-20 saw a £1.40 rise to £10 per hour. A store with two full-time, two over 21 part-time and one under 21 part-time employees faces a £5,449 annual rise, not including pension or NI contributions.
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