The recent Autumn Budget announcements regarding business rates have left many disappointed, especially those in the retail, hospitality, and leisure sectors. Despite promises of reform, the measures introduced by the Chancellor seem to fall short of providing any significant relief. Instead of addressing the fundamental issues at hand, the new policies appear to be more like a temporary fix rather than a long-term solution.
One of the key changes announced is a 40% business rates relief for the retail, hospitality, and leisure industries until 2025/26, with a cap of £110,000 per business. While this may sound promising, it is important to note that this discount will replace the current 75% relief, resulting in a potential 140% increase in business rates for eligible businesses next year. Additionally, the introduction of two permanent lower tax rates for these sectors in 2026/27 may not be enough to offset the impact of the 2026 Revaluation, which could lead to further rate hikes for many businesses.
Furthermore, it has been revealed that the funding for these relief measures, along with the freezing of the smaller business rates multiplier, will come from introducing a higher multiplier for larger businesses with a rateable value of over £500,000. This means that bigger businesses, which are often significant job creators, will be facing increased financial burdens as a result of these changes.
Overall, it seems that the government’s approach to business rates reform has once again missed the mark. There is a lack of comprehensive reform across the board, no efforts to address the unsustainable levels of the larger multiplier, and no solutions for the business rates deserts that exist in some parts of the country. The current system also fails to provide an effective appeals process for businesses in need.
As a result, the future of the high street looks uncertain, with a potential disaster looming if these issues are not addressed promptly. It is crucial for policymakers to consider the long-term sustainability of businesses, especially in light of the challenges faced by the retail, hospitality, and leisure sectors. Without meaningful reform, the high street may continue to struggle, putting jobs and livelihoods at risk.
