Chancellor Jeremy Hunt unveiled a range of new measures in the government’s latest Autumn Statement, claiming it would increase business investment by £20 billion a year over the next decade.
There were 110 new measures in total including large tax cuts, changes to benefits, measures to boost housing supply and policies aimed at improving skills and research and development.
Key announcements set to impact retailers include a 6.7 per cent increase to headline business rates, a freeze on small business multiplier and one year extension of Retail, Hospitality and Leisure relief.
Here’s the latest expert reaction to the measures so far…
“The country needs wholesale reform of our broken business rates system”
- Helen Dickinson, British Retail Consortium
“Retailers and their customers have been sold out by the chancellor’s statement, which does not do enough to support shops, shoppers, and an industry that employs over three million people, and many more across its supply chains. As we enter the Christmas period, this Autumn Statement will serve only to renew inflationary pressures that ultimately harm households.
“The chancellor has poured fuel on the fire spreading across our high streets with a tax hike on shops and other businesses. His decision to increase the business rates standard multiplier will cost retailers hundreds of millions every year. Rather than introduce the meaningful reforms that were promised in the Government’s 2019 manifesto, the Chancellor is now letting the tax spiral out of control, driving up costs just as retailers’ efforts to curb inflation have started to bear fruit.
“This tax hike comes at a time when retail sales volumes have hit their lowest level in two years. Yet business rates must be paid in full before a business sells a single product or service. This flawed tax continues to wreak havoc on our town and city centres, closing shops and costing jobs. And with the Chancellor introducing the largest increase to National Living Wage on record, retailers are under ever increasing cost pressures, even as the Government withdraws its support.
“The extension to the Retail, Hospitality and Leisure relief and the freezing of the Small Business Multiplier is a gesture of support to high streets and while it may help some smaller businesses, it does nothing for those retailers that provide the lion’s share of employment, investment, and low-cost essentials for customers. The chancellor has done little to prevent the decline of our town and city centres and his decision will see thousands of stores pushed into the red, jeopardising their commercial viability. This will lead to inevitable consequences for shops and jobs on high streets, right across the country.
“The country needs wholesale reform of our broken business rates system. Retailers pay over £7 billion a year in business rates – over 22 per cent of the total raised by the tax. This must not continue; it is imperative that we see parties commit to reforming the broken business rates system in their manifestos for the next General Election, and to lowering the disproportionate burden that this tax has on the retail industry.”
“Businesses will find it hard to plan for the future until there is a proper solution to the vexed issue of rates”
- David Jinks, ParcelHero
“The government has again failed to tackle business rate reform, leaving many retailers and businesses in a state of limbo for another year. Yes, the chancellor announced the reapplication of the sticking plaster that is the small business multiplier for a further year. He has also continued the 75 per cent discount on business rates up to £110,000 for retail, hospitality and leisure businesses for another 12 months. While that should save the average independent shop over £20,000 next year, it still leaves the eventual resumption of these rates hanging like the sword of Damocles over many much-loved local stores. Businesses will find it hard to plan for the future until there is a proper solution to the vexed issue of rates.
“One piece of good news for many people is that National Insurance will be cut by 2 per cent – from 12 per to 10 per cent – from 6 January 2024. That could add up to a £450 annual saving for someone on a salary of £35,000. It may be enough to boost consumer confidence at a vital time for retailers. Spending this month has been down on traditional levels for the beginning of the Christmas sales season.
“Knowing there’s a New Year tax decrease might be the incentive for shoppers to return online and in-store and encourage a burst of early Christmas shopping, perhaps in time for Black Friday.”
“While the freeze on relief is welcome, holding the multiplier as a tax cut is disingenuous”
- Chris Grose, Hartnell Taylor Cook
“While the chancellor offered businesses a tax cut, with promises that the small business rates multiplier will be frozen for another year, it’s unlikely that many will see it this way. It’s a cost that has not gone up, and for those businesses not qualifying for the lower multiplier, the UBR will increase with the rate of CPI.
“This is bad news for those whose RV is in excess of £51,000. Since the current non-domestic rates system was introduced, the rate in the pound has increased from 34.8p to 51.2p, which is extremely disappointing. Other tax rates, such as income tax or VAT do not increase by inflation every year, but rely on an increase in the tax base to increase yield, so why should business rates be any different?
“While the freeze on 75 per cent retail hospitality and leisure relief is welcome, holding the multiplier as a tax cut is disingenuous. There is no justification in the amount of tax increasing beyond the value of the increase in rateable value. We also wait for the government to address the elephant that is empty rate reform or Duty to Notify, which it would be remiss not to.”