UK government announces more business rates cuts for small retailers

By

Barbara Santamaria

Published
Oct 30, 2018

Chancellor Philip Hammond announced business rates cuts, a dedicated task force and more investment to boost Britain’s high street as he emphasised the need to adapt in a Budget statement on Monday.

Hammond said the high street is “under pressure as never before” as British consumers embrace online shopping at a faster-than-expected pace, and struggle with rising costs including business rates and import costs.

In total, the government is planning £1.5 billion worth of initiatives to support high street retailers and local businesses, which are expected to deliver much needed footfall and boost consumer spending.

The measures include cutting business rates cut for small retail business by a third for two years from April 2019, saving them £900 million. The tax, which is calculated based on a property’s rateable value, put hundreds of small and medium businesses under pressure after last year’s revaluation. Industry bodies and experts have asked for a rethink, claiming the current system is crippling the high street.

Hammond also announced a £645 million fund to pay for local projects, such as improving transport links, re-develop empty shops as homes and offices, and restore historic properties. 

A dedicated team of experts will be formed to help local offices draw-up formal plans for the transformation of their high streets and facilitate the redevelopment of under-used retail areas.

But despite efforts to support the high street, the British Retail Consortium said the measures “are not sufficient to enable a successful reinvention of our high streets.”

“The Government has missed a much-needed opportunity to help the retail industry. While we welcome measures to assist smaller retailers, the majority of the UK's 3.1 million retail workers are employed in businesses that will not benefit from today’s business rates announcement,” commented Helen Dickinson, chief executive of the industry body.

"Retailers are currently in the midst of a perfect storm of factors – technology changing how people shop, rising public policy costs and softening demand. Rather than tinkering around the edges, struggling high streets require wholesale reform of business rates in order to thrive. The issue remains that the business rates burden is simply too high,” she continued.

Since 2016, the government has introduced business rates relief measures worth £12 billion.