Chancellor must cancel planned business rates increase – expert
The Chancellor must cancel the business rates rises due in April for all businesses when he announces his Spring Budget today - or the high street will be put under even greater threat than it is already.
That’s according to John Webber, head of business rates at Colliers, who said: “If the Chancellor does not take action to reduce this rates burden, we will see more retail chains going into administration.
“Retail, Leisure and Hospitality Relief may have provided a temporary reprieve to the small shopkeeper or independent restaurant but gives no help to the big retail and leisure chains who are the anchor tenants in so many town centres and retail spaces and provide the opportunities for jobs.”
Webber is urging the Chancellor to cancel the planned business rates increase in April - by reversing the decision made in November, when he increased the standard multiplier using the September rate of inflation figure of 6.7p, particularly as inflation now stands at 4 per cent.
He said: “The Chancellor did freeze the small business rate multiplier and bring in the retail, hospitality and leisure relief for small companies, but larger companies will still see their rates bills rise in line with the multiplier which will increase from 51.2p to 54.6p in the pound.
“This will impact 220,000 businesses who will pay an extra burden of £1.66bn in tax from April 1, 2024.
“Colliers has estimated that the businesses in the retail/leisure sector will pay over £360 million more in business rates, the offices sector around £400 million more and logistic/ industrial sector around £450 million more as a result of the increased multiplier.”
Additionally, Webber says the Chancellor should announce a plan to reduce the multiplier.
He said: “The multiplier (the UBR used to calculate rate bills) should be reduced across the board.
“Business rates are not linked to performance and property occupiers must pay them before they have earned a penny of income.
“At 49.9p and 51.2p (soon to be 54.6p) for small and large businesses respectively, business rates are unacceptably high compared to the rate of 34p when they were introduced in 1990. We believe they should be rebased to a fairer level that everyone can afford to pay.
“The Chancellor therefore could restore investor confidence by announcing a long-term plan to reduce the multiplier to 34p.
No other European country charges businesses half the rental value of their premises in property tax and at such a high rate, business rates are a significant deterrence to new investment in the UK. By reducing the UBR, the Government would encourage investment, expansion and innovation.”
Other measures Colliers are calling for include extending retail, hospitality and leisure relief until the next revaluation in 2026, extend empty property rates relief to 12 months and to more sectors and clamp down on “cowboy rating advisors.”
Mr Webber concludes: “The Conservatives won the General Election in 2019 promising genuine reform of business rates and to ‘cut the burden of tax by reducing business rates.’
“So far it has spectacularly failed its election pledge. Instead, we have a system that hinders businesses from expanding and deters prospective investors from overseas avoiding making new investment here in the UK because the business rates burden is so high.
“A tired Government and work from home “group think” civil servants have resulted in the burden of business rates continuing to climb – this Government is in the last chance saloon – let’s hope they do the right thing after all, even if it is 14 years too late!"
