The news that the UK has entered recession brings into sharp focus the difficult decisions on taxation which face government.
Finance ministers are having to balance putting up taxes to shore up the public finances against the impact of higher taxes on economic activity by households and businesses. Those decisions have a material impact on retailers’ sales and outgoings and their ability to keep down prices for customers.
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Tax announcements have been coming thick and fast. UK ministers recently trimmed employee national insurance contributions. The Chancellor is considering restoring tax-free shopping and allegedly mulling reductions in personal tax. Hopefully, his Budget this week will reform the apprenticeship levy which in Scotland, following the axing of the flexible workforce development fund, is little more than a tax on jobs.
Meanwhile, Scottish Finance Secretary Shona Robison has unveiled a raft of tax changes. Scottish income tax will increase for higher earners, which could impinge on retailers’ ability to attract specialist or senior talent from........