The Association of Convenience Stores is calling for the government to radically rethink its policing of alcohol and tobacco duty fraud.
In its submission to the government ahead of the emergency budget on June 22, the body – which represents 33,500 local shops – also urged the coalition to resist hiking VAT.
Other demands included: no further increases in employment costs; immediate action to make small business relief automatic; and government intervention to reduce the terms on which banks loan to small businesses.
“It has been a longstanding policy to increase the tax on alcohol and tobacco products as a means to reduce consumption,” the submission read.
“Tobacco smuggling is estimated to cost the taxpayer more than £4.1bn per year in lost revenue, while alcohol smuggling costs the taxpayer over £1bn per year. Combating this problem requires a review and refocus of strategic responsibilities.”
The ACS warned that that a hike in VAT to 20% would damage the retail sector, while c-store operators are concerned that there could be the exemption for food could be lifted.
An increase, it argues, would reduce consumer spending, further squeeze margins and cause operational disruption for retailers.
The British Retail Consortium will publish details of its submission next Monday, when it is expected to ask the government to focus on public spending cuts rather than increased taxation.
Threat of rise in VAT sparks pricing concern for local stores (Convenience Store; 31 May 2010)
Cameron and Clegg: You’ve sorted yourselves out, now what about us? (15 May 2010)