Chancellor Jeremy Hunt has delivered his autumn statement, announcing business rates will be frozen for small business for a year, as well as extending the 75% discount for retail, hospital and leisure companies for another year.
He said the 75% discount on rates up to £110,000 has saved shops an average of £20,000. Hunt added that, while the standard multiplier for rates on high-value properties will rise in line with inflation, the multiplier will be frozen for small businesses for a further year.
Nigel Oddy, CEO, American Golf, said: “Extending the 75% freeze on small business rates will be welcome news for smaller, eligible retailers, and will help them in their bid to maintain current retail prices, which in turn will help consumers.
“However, more could have been done to support high street retail. The rates system is outdated and is penalising larger retailers who are keen to invest in bricks and mortar, as well as online. Rates are an unjust burden on the balance sheets of large high street retailers and impede growth in jobs, stores, and innovation.”
Small business owner Jenny Blyth, from Storm in a Teacup Gifts, added: “Jeremy Hunt says they ‘back British business’. Not only are small businesses not ‘backed’, we are forgotten. The high street no longer exists and the small business world is falling in on itself. Without immediate support, we run the risk of losing thousands of micro businesses run by people like myself who want to make a difference.
“We have been resilient through a pandemic and held firm during a cost of living crisis but now we have no strength left and our Chancellor turns his back. We simply don’t matter enough to make the grade. Abolishing obligatory Class 2 NI contributions and making it voluntary simply means that by opting out we are less likely to qualify for a full state pension. Not quite as nice as it seems.”
Scott Parsons, chief operating officer UK, at Unibail-Rodamco-Westfield, noted: “Although there is some relief for small business, once again the chancellor’s lack of impactful reform to business rates is disappointing news for British retail. The industry is screaming out for permanent reductions to occupancy taxes, which still stand at up to ten times more than other European countries, putting the UK at a huge competitive disadvantage.
“On top of this, it’s a blow for the industry to see no moves towards an online sales tax to level the playing field between online and physical retailers, or reinstating tax-free shopping for international visitors to fuel tourist demand, boost consumer spend and support economic growth.
“This was the moment for clear, decisive action from the government, however yet again too few meaningful solutions have been offered to support sector growth, at a time when the industry needs it the most.”
Helen Dickinson, chief executive of the British Retail Consortium, commented: “While increasing the NLW, pensions via the triple lock and benefits and reducing national insurance, are all very well and good, they won’t help consumers much if the prices of what we buy stay high. Retailers and their customers have been sold out by the Chancellor’s statement, which will do little to support shoppers, and the industry that employs over three million people, and almost three million more in its supply chains. This Autumn Statement will serve only to renew inflationary pressures that ultimately harm households.
“It was missed opportunity to do the things the Government already targeted itself to do ie to help bring inflation down. As hundreds of millions of taxpayers’ pounds have gone on 11th-hour gigafactory and steel bailouts, surely he could have found the opportunity to stop the business rate burden rising by nearly 7% next April. And more widely, full investment allowances are great but not if they don’t cover the biggest investment expenses that retailers are making ie into digital, future focused, assets rather than plant & machinery.”
John Webber, head of business rates at commercial real estate agents Colliers, stressed: “The chancellor’s actions will be a massive hit to the high street. Although most businesses in the retail and hospitality sectors have benefited to some extent from the 2023 Revaluation, the sectors are still under pressure facing higher occupational costs across the board as energy, employment and insurance costs soar- yesterday’s rise in the national living wage only adds to the pressure.
“In his rush to save his job, the chancellor has ignored the calls of the BRC and UK Hospitality and seems to have forgotten that the larger retailer and hospitality companies are the main employers in their sectors. Hitting them with a 6.62% rise in their rates bills next April will have a dire impact and certainly dampen expansion and growth plans.
“For some businesses it might be the last straw. The situation is even more bizarre when we see the current inflation figure has already fallen to 4.6% and may be around 3% next April, but we would see such businesses tied to the 6.62% figure for the year.”
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