Research reveals VAT reductions could plough billions into retail sector

by | Nov 14, 2016 | News | 0 comments

Research from NFU Mutual shows a cut in VAT could plough billions into the UK retail sector

???????Up to ?11.2bn could be ploughed into the retail sector

? ? ? ?Two thirds (67%) of consumers would increase some spending if VAT is reduced

? ? ? ?58% of these would increase some spend in retail, making it the sector benefitted most

Research from commercial insurer NFU Mutual has found that two thirds of consumers would increase spending if a reduction in VAT is announced in the Autumn Statement.

The retail is the sector set to benefit most, with over half (58%) of those likely to increase some spend using the cash to purchase items such as clothing, electrical goods and home and DIY products. High street and online stores could benefit from increased spend almost equally, with shares of 51% and 49% respectively.

A cut in VAT by 5% could provide the average UK adult with extra spending power of ?547 per year. With NFU Mutual?s research showing that 67% of consumers would increase some spend as a result of VAT savings and 58% of these increasing spending in retail, British retailers could look forward to a potential cash injection of up to ?11.2bn.

Frank Woods, retail sector specialist at commercial insurer NFU Mutual, said: ?The encouraging sign is that there is clearly an appetite for increased spending in retail amongst consumers.

?With consumer spending coming under some pressure from rising inflation, the Chancellor?s decision to ?reset? fiscal policy could possibly include the option of cutting VAT by as much as 5% to support growth. Our research suggests that even in a more probable situation of a 1% cut, up to ?2.2bn could be ploughed into British retail business. With other announcements such as increased infrastructure spending seen as more likely, whether this opportunity can be delivered to customers and benefit UK retail businesses remains to be seen.

18-24 year olds were found to be most likely to spend (78%), with retail set for a boost as the extra cash would be most likely spent on the high street (20%) and online shopping (26%).

Frank Woods continued: ?There is however no guarantee that the spending power of consumers will be ploughed back into UK businesses. Our research showed increased online spending in 24% of people, which could include spending on imported goods from around the world. While the overall Autumn Statement is expected to support growth, any boosts such as a cut in VAT could also be offset by increases in other taxes, meaning that savings aren?t necessarily felt.?

more latest news ➡

New logo for the Bransford Webbs Plant Company

A fresh, new look for The Bransford Webbs Plant Company

The Bransford Webbs Plant Company is proud to unveil a new company logo, launching at The 2024 National Plant Show at Stoneleigh Park. An evolution of the original Bransford Webbs logo introduced almost twenty years ago; the heritage shades of purple and green have...

GCA CEO Peter Burks hosting a free sustainability webinar this month with the focus on water and ‘navigating the green minefield’

Free sustainability webinar for GCA members

Garden Centre Association (GCA) members will hear from a trio of sustainability experts during a free webinar this month (June 2024). The GCA is hosting the online event on June 26 from 3-4.30pm and it will cover water conservation and how to navigate environmental...

Retailers

Nearly 40% of UK retailers fail to meet delivery times

A new study, carried out by post-purchase customer experience provider parcelLab and e-commerce customer care - and fulfilment specialist Salesupply, highlights significant gaps in delivery reliability, tracking transparency and customer service...

Blue Diamond posts 2023 figures

Blue Diamond posts 2023 accounts

The new largest garden centre group Blue Diamond has posted its 2023 accounts which shows a £24.2m profit – a 16% increase on 2022. Sales for 2023 were £310.6m versus £259.3m last year, a 20% increase on 2022, and a 9% like for like uptake. This marks an important...

Read GCR's latest edition!

Subscribe ToThe Wednesday Word

Subscribe To
The Wednesday Word

 

Get all the latest news, events & more straight to your inbox every Wednesday.

You have Successfully Subscribed!

Pin It on Pinterest

Share This