The UK government has announced a £13.6 billion scheme, offering support on business rates in a bid to help with “prices rising and growing uncertainty”.
Speaking at the House of Commons, Chancellor Jeremy Hunt, who revealed the UK is already “in a recession”, announced the UK government will go ahead with a revaluation of properties for business rates, in a bid to “soften the blow”.
According to Hunt, businesses “should accurately reflect their market value”, promising two-thirds of properties “won’t pay a penny next year”, stating that “thousands of pubs, restaurants and small high street shops” will benefit from this move.
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Hunt continued a new government-funded transitional relief scheme will be also introduced, as called for by business trade bodies, which the Chancellor said will benefit around 700,000 businesses.
Setting out his economic plan, just weeks after predecessor Kwasi Kwarteng’s mini-budget, Hunt said the UK faced “unprecedented global headwinds”. The news comes as industry leaders have been urging the Chancellor to extend current business rates relief beyond April, as well as abolishing plans to increase rates in line with inflation, which is currently at a 41-year high.
Commenting on the Autumn Budget, CEO of the British Property Federation (BPF) Melanie Leech said: “Businesses across the UK are facing unprecedented cost pressures and we are pleased the Chancellor has listened to the BPF, frozen the business rates multiplier and introduced further reliefs, to help prevent a tide of insolvencies on the high street.
“Many high street businesses have been paying artificially high rates bills for years and the Chancellor has recognised this is simply not sustainable.”
According to Chris Grose, rating director of Hartnell Taylor Cook, despite a £14 billion tax cut over the next five years would “seemingly have a positive impact for businesses”, the devil will be in the detail,” he said.
“It is with massive relief that the government has finally listened to us and other industry bodies about out-of-control business rates rises following the next Revaluation,” Colliers head of business rates John Webber continued.
“By removing any downward transition, the government has finally recognised that the business rates system cannot be revenue neutral without causing significant hardship.”
He added: “I take my hat off to the government. This is a major boost to the high street and to businesses in general and a fair appreciation of the economic situation. It shows that our campaign on behalf of business has been worth it. “
However, KPMG’s head of retail Paul Martin said whilst the prospect of support for retail businesses coming next year will be welcomed, the UK is in recession now and many retailers will be focussed on surviving the next few months as consumer confidence and spending declines, and costs continue to rise.
“The question remains, will the support offered from April next year be too little too late for some struggling retailers?” he added.
