The decision to slash the retail, hospitality and leisure relief scheme from 75% to 40% is absolute madness.
It will see rates bills more than double overnight for 250,000 small businesses, leading to business failures and job losses.
These sectors continue to suffer from the long-term effects of the Covid lockdowns, a fall in consumer spending and a move away from traditional bricks-and-mortar retail.
Many in the sector will quite rightly feel betrayed given Labour’s manifesto promise to ‘level the playing field between the high street and online giants’.
Increasing the UBR paid by larger properties by 1.7% brings the tax rate to an eye watering 55.5%, lumping an extra cost of £444 million onto 220,000 businesses. This hardly aligns with Labour’s manifesto promise to replace business rates to ‘better incentivise investment’ and ‘support entrepreneurship’.
Businesses will be hugely disappointed. After three years of Labour promising abolition and replacement of the business rates system, which remains one of the highest taxes of its type in the western world, it looks like the business community is set for further delay as the government engages with stakeholders about changes that at best seem likely to lead to mere tinkering around the edges. This falls woefully short of what they were hoping for.
