Chancellor Jeremey Hunt has announced his ‘budget for growth’ that he detailed would reduce inflation and debt and grow the economy during the ongoing cost-of-living crisis. We look at what the Spring Budget for 2023 means for e-commerce retailers and the impact it may have.
Energy price cap
It was announced by the chancellor in the Spring Budget that the energy price cap will be extended for three months. This means that average household bills will remain capped at £2500 per year until at least June rather than £3000 as planned.
Although there was no mention of energy bill support for businesses, the government guarantee is likely to relieve pressure on households in the UK and free up disposable income that can boost e-commerce retail spending.
Free childcare for under 3s
Free childcare for working parents to all children over nine months will be rolled out as part of the Spring Budget by 2025 as the government focuses on getting more parents back to work.
Get A Free Quote
Breakout E-commerce accountants and Xero specialists to supercharge your UK online business growth.
It is expected this childcare scheme will see over 60,000 more parents to children go back to work. As it stands, childcare costs in the UK are among the highest in the world, and free childcare could be the key to allowing parents to afford to go back to work.
The retail sector is the biggest employer in the United Kingdom and this transition could help boost talent pools in the industry.
The Tax-Free Childcare scheme is open to all qualifying parents, including those who are self-employed.
Corporation tax increase
From April 1, corporation tax will rise to 25 per cent from 19 per cent. However, this will only apply to e-commerce businesses with an annual profit of over £250,000 and the Treasury insists the majority of businesses will be unaffected.
Businesses with an annual profit of £50,000 or below will continue to pay the current rate and those with profits between the upper and lower limit will be provided marginal rate relief.
Research and development incentives
E-commerce businesses that spend 40 per cent of their expenditure on research and development investment will benefit from the enhanced R&D tax credit scheme introduced in the Spring Budget.
Under this scheme, for every £100 investment in research and development, e-commerce businesses can receive £27 from HMRC in tax credit relief.
If your e-commerce business is in the habit of innovating, it may be worth claiming back some of your costs via research and development tax credits. Even if your project is unsuccessful, you may still be able to claim for your efforts.
More opportunities for over 50s
‘Returnships’, an internship equivalent for those over 50, is another initiative introduced in the budget to further encourage people back to work. This scheme aims to put skilled and experienced workers back into the workforce.
Returnships could prove beneficial to e-commerce businesses by providing access to skilled, trained, and experienced workers. Hiring and training new employees can be costly to e-commerce businesses, so when the opportunity arises to hire somebody with the skill set and expertise to fulfil the role, it could be a win for both businesses and returners.
What was missed?
Although measures such as energy bill support and free childcare are welcomed changes, many e-commerce retail businesses believe the Spring Budget was a missed opportunity.
With no mention of VAT-free shopping, Sunday shopping hours, or business rates, e-commerce and retail businesses plea for more support from the government and the Spring Budget.
It is believed more could be done to help online retailers amid the current cost-of-living crisis as they continue to experience high costs through the entire supply chain.
If you are an e-commerce business owner looking for financial advice and support, get in touch with the team at Unicorn Accounting today. Our specialist e-commerce accountants can make a world of difference in scaling your business with individual and honest advice.
Contact us today to discuss what the Spring Budget 2023 means for you.
Related articles
https://unicornaccounting.co.uk/blog/why-you-need-an-ecommerce-accountant/
https://unicornaccounting.co.uk/blog/5-challenges-for-ecommerce-brands/
https://unicornaccounting.co.uk/blog/the-5-e-commerce-tools-every-small-business-needs/
Get A Free Quote
Breakout E-commerce accountants and Xero specialists to supercharge your UK online business growth.
