Following the UK Government’s budget announcement today (Wednesday 11 March); Patrick O’Brien, UK retail research director at GlobalData, a leading data and analytics company, offers his view: “A restructure of business rates to reduce the disproportionate burden on retail chains looks further away than ever. Despite a concerted effort by retail bosses in the weeks leading up to the budget to put pressure on the government to help, they were left disappointed by Chancellor Rishi Sunak, who only reiterated the previous promised “fundamental” review.
“While the government is abolishing business rates for small retailers, having already cut it by 50%, this is only for firms with a rateable value of less than £51,000. For larger retail chains already struggling with increased labour costs, as well as crippling rent and rates bills – not to mention the prospect of the short term impact on consumer demand, there was little reason to agree with Sunak that his budget “gets it done”.
“Retailers will have to keep the pressure up as the rates review gets underway, and is scheduled to report in the autumn. But retail has been through such reviews before, and no government as yet has been prepared to alleviate the tax burden on traditional retail, due to the need to significantly increase the tax bills of other businesses, or increase other taxes.”