The business rates reform announced by chancellor George Osborne in last week’s Budget do not go far enough to support smaller businesses and counteract rising costs, independent retailers across the UK have said.
On March 16, Osborne revealed that business rates will be permanently scrapped for properties with a rateable value of £15,000 or less from next April. The current threshold for small business rate relief is £6,000.
He also increased the higher rate relief threshold from £18,000 to £51,000. As a result, 600,000 small firms will not pay the tax, saving them an average of nearly £6,000 a year. A further 250,000 businesses will have their rates cut.
While retailers welcomed the reforms, many felt the benefit will be offset by the introduction of the national living wage from next month and the apprenticeship levy in April 2017.
You cannot have austerity measures at the level we have and expect the local councils to manage on a reduced rates revenue,” said Hilary Cookson, owner of womenswear independent Maureen Cookson in Whalley, Lancashire.
“Car parking charges, rural bus services and the uncertainty politically with the referendum looming are all drying up signs of recovery. This is going to be a very tough year. While the cut in business rates is welcome, the savings can be guaranteed to be lost in the living wage increases and all other issues that continue to challenge the small businesses.”
Michael Weedon, deputy chief executive of the British Independent Retailers Association, said “a job remains to be done”.
“It doesn’t go as far as we would like. We suggested that all premises should have some relief, so it would work more like personal allowance on tax. It is progress but not fundamental reform, so they need look [at business rates] further.”
Russell Jones, director Robinsons of Bawtry in South Yorkshire, said: “Any review of business rates is a great help, so it’s good that they are looking at it. They don’t have a lot of wriggle room, so I wasn’t expecting a lot but I was disappointed they didn’t give us a break on VAT, as it comes straight off our margins.”
Jo Davies, owner of contemporary womenswear retailer Black White Denim in Wilmslow, Cheshire, said the higher rate relief threshold should give her business “some relief” and added that the change to income tax thresholds will mean shoppers will have more money in their pockets.