The Retail Motor Industry Federation (RMI) represents 8,000 motor sector businesses that sell, service and repair new and used vehicles, employing 600,000 individuals and is the customer-facing side of the motor industry. Sue Robinson, RMI Director Today’s Budget announcement provided a few positives for the retail motor industry but in the main did not address the key issues affecting the industry. The Chancellor appeared to play for political gain and did not focus on many of the key issues facing businesses today following the recent difficult economic period. The following measures will help businesses to some degree: Annual Investment Allowances The increase in the annual investment allowance to £100,000 per year is a welcome incentive for businesses to invest in capital equipment an infrastructure. However this has not been taken far enough for some businesses that make large scale capital investment, such as truck fleet operators. Business Rates The announcement to halve business rates for one year from October 2010 will help many businesses, but this does address some of the anomalies in the rating system particularly for SMEs. Tax Payments The announcement to extend businesses ability to stage VAT and other tax payments will be very welcome for businesses and will help cash flow immensely; we are pleased that this has been extended for more than one year. We are disappointed that certain key issues affecting the motor industry were not addressed: National Insurance The retail motor industry along with the UK in general has seen difficult employment conditions. The proposed 0.5 per cent increase in employee and employer national insurance contributions from April 2011, will significantly increase employment costs in the sector and is likely to lead to businesses needing to review their staffing numbers and has the potential to lead to staff cuts. We continue to urge the Government to reconsider this increase. Small Business Corporation tax Small businesses are the driving force of the UK and need support during this critical period of recovery. We are concerned that the Government did not consider a reduction in small business corporation tax to help SMEs during this difficult economic period. First Registration Tax We are concerned that the Government is still going ahead with the first registration tax on new cars from 1 April 2010. The new car market is likely to see some uncertainty with the Scrappage scheme coming to an end at the end of March and it would seem extremely bad timing to introduce a tax increase on new vehicles at the same time as an incentive to buy is removed.