Chancellor Phillip Hammond has announced, in his Autumn Budget, that business rates will be cut by one-third for smaller shops, says commercial property agent Prop-Search, as the Government recognises that smaller retailers are struggling to cope with high fixed costs including business rates.
Over the next two years, the Government will cut the rates bill by one-third for businesses with a Rateable Value of less than £51,000, for a two year period from April 2019.
Samantha Jones, as Associate Director of Prop-Search, said: “The Chancellor estimates that this would be an average annual saving of £8,000 for 90% of independent businesses and would complement existing business rates relief worth £12bn.”
She added: “It was however disappointing that the relief was not extended to the growing list of struggling retail chains. Physical retail chains continue to bear a disproportionate burden of business rates and while the current Government included a manifesto commitment to conduct 'a full review of the business rates system to make sure it is up to date for a world in which people increasingly shop online', it avoided tackling the issue head on.”
Hammond did however announce a digital services tax for ‘tech giants’. He said it would not be a tax on online sales, and will only be paid by firms that are profitable and generate £500m or more in annual revenue. The tax will come into effect in April 2020 and is predicted to raise £400m a year.
On a positive note, the Chancellor said that High Streets were ‘embedded in the fabric of our cities, towns and villages’, and were ‘under more pressure than ever before’ due to the growth in online retailing. In response, the Government has announced a £675m Future High Street Fund to support local councils to invest in improvements and redevelop unused areas.
Lastly, 100% business rates relief was announced for public lavatories, with the Chancellor joking that Local Authorities could at last relieve themselves; they shouldn’t get bogged down in it and that it was about the only thing in his Budget speech that hadn’t been leaked!
Further information or advice can be obtained from Prop-Search - Tel: 01933 223300 or its website: www.prop-search.com