Chancellor gives few clues on business rates rise
Jeremy Hunt has given few hints that he will delay an uprating of business rates or offer an extension of relief on the tax.
There are expectations that Mr Hunt will take a hard line on rates and also reject calls by the CBI to extend the super deduction tax break on capital spending beyond next March.
The CBI and retail organisations have urged the Chancellor to delay plans to raise business rates by the consumer prices index measure of inflation, which as of September stood at 10.1%.
Chief executives from Tesco, Sainsbury’s, Iceland and Greggs are among the signatories to a letter from the Retail Jobs Alliance, which warned that business rates were putting retailers at “breaking point”.
In an interview with The Sunday Times, Mr Hunt said: “I can’t tell you what I’m going to do on business rates, but what I can say is that I think businesses want certainty about what the government’s going to do so they understand where they stand.
“When there’s so much other instability around, the more certainty I can create the better.”
His decision will affect rates in England but will influence the Scottish interim Finance Secretary John Swinney who has devolved power over business rates. Mr Swinney is also being urged to delay increases in rates.
There is also a plan to revalue business rates, which will see bills altered to reflect changes in the rental market. The next review will be based on rental prices in April 2021, during the Covid-19 pandemic.
Research by CBI Economics, supported by the Scottish Retail Consortium, last week suggested that the retail sector faces increases of up to 25% over the next two years.
David Lonsdale, director of the Scottish Retail Consortium, said: “A growing cross-section of Scottish commerce and industry is voicing serious doubts about the wisdom of hiking up the business rate next April, something which was ominously mooted in the Scottish Government’s recent spending review.
“The business rate is already at a 23-year high and any uplift next Spring would set alarm bells ringing across retail and other sectors with a significant property footprint in Scotland. If the increase matched the current inflation rate it could add £60-65 million just to retailers’ rates bills alone next April.
“Such a hike would be gruelling for stores to absorb; and make rejuvenating high streets and retail destinations even harder. It would be putting rocks in the retail industry’s rucksack as it seeks to recover and climb out from some of the worst trading conditions seen in decades.”