The Chancellor has used his last budget of this Parliament to reconfirm his commitment to carry out the most “far-reaching” and “radical” review into the business rates system in a generation, kick-starting a process that leads the way to changes to how businesses across England pay the tax.
The government first revealed that it would carry out a comprehensive review of the outdated system during last year’s Autumn Statement and businesses were encouraged by the publication of its terms of reference this week. It was also confirmed that the government would go ahead with further help on rates including the extension of both the small business rates relief for another year and transitional rate relief to support small business facing significant bill increases due to the ending of transitional rate relief. Retailers will also see roll over for another year of the discount for retailers with properties of less than £50,000 rateable value.
The Chancellor also included a number of announcements that stand to benefit the consumer as well as the retail industry more widely.
Commenting on the business rates announcement Helen Dickinson, British Retail Consortium director general, said: “We welcome the official announcement of a ‘radical’ review of the business rates system and we’re looking forward to working with the government throughout the process to make sure a new system is modern, sustainable and crucially – competitive.
“It’s important then to get the review process right, so that we don’t waste this great opportunity and can guarantee that we end up with a system which is better for business, better for local government and better for the communities that retailers and other rate payers serve every day.
“The government is now seeking the views of UK business on a whole range of questions about the future structure of the system. In addition, it’s critical that it seeks an authoritative and independent analysis as the review progresses, so as to ensure the final solutions are based on objective, robust hard evidence.
“There are plenty of interpretations of what fiscal neutrality means and I would encourage that as broad a view as possible is taken. Another positive step forward for the government to take would be to explain what is meant by fiscal neutrality.
“With cross-party political support for a fundamental review of business rates I’m confident that we can put an end to this drag on our local and national economy.”
On support for consumers:
“The Chancellor included very welcome support for consumers. Extending the personal Income Tax allowance, the new Personal Savings Allowance and increasing the flexibility of ISAs will all make the pounds in our pockets go that little bit further. An additional welcome measure was the announcement of a further year’s fuel duty freeze. Taken together these will provide customers with significant additional help when balancing household budgets.”
On the National Insurance Contributions announcement:
“Young people are at the heart of the retail workforce – over 1 million of the 3 million people who work in retail are under 24 years old. The Chancellor’s abolition of NICs for under 21s lifts a significant burden from the industry and will allow retailers of all sizes to create new job opportunities for many more young people. The retail industry also employs almost 20 per cent of the UK’s apprentices and we know that it’s a great way for young people to earn while they learn. Abolishing NICs for young apprentices will make it easier and more cost effective to employ and train them. Not only will this be welcomed by retailers and the wider business community, but also by the young people who will benefit from the opportunities that working as an apprentice brings.”
On the digital infrastructure announcements:
“Improving mobile networks and digital infrastructure, bringing ultrafast broadband of at least 100 megabits per second to nearly all homes in the country are all worthy ambitions. Digital technology is increasingly playing a vital role in guaranteeing that our high streets are attractive, sustainable and can meet consumers’ ever-increasing expectations.”
On UKTI announcement:
“Increasing UKTI’s resources to double the support for British exporters to China is also a positive step forward. UK retailer’s brands are much in demand in China and our retail industry’s exports provide a great opportunity for the UK economy.”
On the national transport infrastructure announcements:
“The new investment in transport and infrastructure announced in today’s budget is good news for the retail industry. A modern, reliable transport infrastructure will better enable retailers to move goods from suppliers to distribution centres and stores and ultimately to the consumer as efficiently and conveniently as possible.”