Industry has slammed today’s mini budget as a missed opportunity to address “unaffordable” business rates.
BRC CEO Helen Dickinson welcomed the Energy Bill Relief Scheme, set out earlier this week, and moves on National Insurance and corporation tax, saying they would “help retailers shield their customers from some of the effects of inflation”.
But she warned retailers faced “immense cost pressures, not just from energy bills, but also a weak pound, rising commodity prices, high transport costs, a tight labour market and the cumulative burden of government-imposed costs”.
“Yet what was missing from today’s announcement was any mention of business rates, which are set to jump by 10% next April, inflicting another £800m in unaffordable tax rises on already squeezed retailers,” Dickinson said.
“It is inevitable that such additional taxes will ultimately be passed through to families in the form of higher prices.”
She said there was still time for the government to act and urged it to freeze the business rates multiplier to stimulate investment and allow retailers to focus on keeping prices down.
The British Property Federation also said it was “disappointing” Chancellor Kwasi Kwarteng hadn’t used his statement to set out action on business rates.
“This archaic tax is one of the fundamental causes of high street and town centre decline and its current unsustainable burden on businesses does not fit with the government’s vision for a low-tax, dynamic economy,” said BPF CEO Melanie Leech.
“We urge government to look again at how the system can be modernised.”
John Webber, head of business rates at property consultancy Colliers, said the mini budget had missed the “elephant in the room”.
“The Chancellor has said he is simplifying the tax system – in which case he should simplify business rates, one of the most complicated taxes in the UK today,” Webber said.
“He can start this by providing reassurance that rates bills next year will immediately reflect the lower rents we are seeing in the market now – providing incentives for businesses to keep or expand space and for property investors to invest in the sector across the UK.”
Robert Hayton, UK president of real estate adviser Altus Group, said: “For a self-proclaimed low tax, pro-growth, pro-business government, it beggars belief that inaction on business rates could see the total tax take rise by £5.33bn next April with discounts for retail, leisure and hospitality ending as well as the government profiteering from high inflation.”
UKHospitality CEO Kate Nicholls said: “Today’s announcement includes a number of positive measures which will bear fruit in due course, but more is urgently needed to help struggling businesses survive through the winter. There’s a clear shortfall between the positive tax plans and the lack of needed immediate business support.”