Retail and hospitality business rates halved
The Chancellor’s autumn budget has provided plenty of cheer for the retail, hospitality and leisure sectors with cuts to duty on draft ale, cider and sparkling wines served in pubs and restaurants and a 50 per cent cut in business rates for one year.
In announcing the measures, Rishi Sunak said the huge business rates discount was to help support the economy.
Mr Sunak said this is a tax cut worth almost £1.7bn - and added that, with Small Business Rates Relief, more than 90 per cent of all these businesses will see a rate bills cut in half.
He confirmed business rates would be retained and reformed, telling MPs: “We on this side of the House are clear that reckless, unfunded promises to abolish a tax which raises £25 billion every year are completely irresponsible.”
The Chancellor added: “First, we will make the business rates system fairer and timelier with more frequent revaluations every three years. The new revaluation cycle will be delivered from 2023.”
He went on: “We’re introducing a new investment relief to encourage businesses to adopt green technologies like solar panels. And I’m announcing today that we’ll accept the CBI and the British Retail Consortium’s recommendation to introduce a new ‘business rates improvement relief’.
“From 2023, every single business will be able to make property improvements – and, for 12 months, pay no extra business rates.”
In its autumn Budget submission to the UK government, the BRC had put forward three recommendations.
It said the Treasury's fundamental review into business rates, which is expected to be published this autumn, must result in a “long-term substantial reduction of the £8bn annual tax burden on retailers and the ending of a downwards phasing of transitional relief”, which has cost retail more than £500m between 2017 and 2020.
It also called for the government to remove the requirements for rates to raise a fixed sum. Instead, rates should be adjusted in line with the economy.
Finally, it proposed the introduction of a one-year "bridging relief", which would mean a reduction of 30% for rates payers for the 2022 to 2023 financial year to account for the reduction in retail rent since 2015.
Helen Dickinson, BRC chief executive, said: “The evidence is clear: business rates are costing shops and jobs and undermining the government’s ‘levelling up’ agenda. Retail is the UK’s largest private sector employer and serves as a vital lifeline to places most in need of levelling up, offering flexible jobs, supporting other businesses on the high street, and breathing life into local communities. The business rates review is a great opportunity for government to put the ‘shops tax’ into reverse, and support investment and growth in the regions that need them the most.”