Follow us

Menu
PARTNER WITH USFREE NEWSLETTER
VISIT TheIndustry.beauty

Chancellor confirms autumn budget, including temporary business rates discount

Tom Shearsmith
27 October 2021

Chancellor Rishi Sunak has delivered his autumn budget to the House of Commons, pledging to create a new post-COVID economy and invest in the economy, transport, health and education.

This will be Sunak's second budget of the year, having previously delivered a statement to the House of Commons on 3 March, after the previous address was delayed due to the COVID-19 pandemic.

National Living Wage:

The National Living Wage for people aged 23 and over will rise 6.6% from £8.91 to £9.50 an hour, while a pay freeze on public sector wages will be lifted. The Government claims this will give full-time workers an extra £1,000 a year.

Compared to 2020, the Chancellor said wages have grown by 3.4%.

Business Rates:

The Chancellor confirmed he will not scrap business rates, citing that he would need to plug the £25 billion gap it would create by raising taxes and cutting services.

The Government will therefore aim to make the business rates system fairer and timelier with more frequent revaluations every three years. The new revaluation cycle will be delivered from 2023.

There will be a new one year 50% business rates discount for the retail, hospitality, & leisure sectors. This will mean any eligible business can claim a discount up to a maximum of £110,000. It said this will benefit around 90% of businesses across the sectors.

Jace Tyrrell, Chief Executive Officer of the New West End Company, responded: "It’s encouraging to see the Chancellor finally act upon the need to reform the business rates system. Cancelling the inflation-linked rise to the multiplier may ensure that rates won’t go up this year, but they are still too high.

"Reducing the time between revaluations to three years is welcome, as is the short-term relief for investment in improvements and sustainability, but this falls far short of a fundamental review. This simply doesn’t meet the Government’s manifesto commitment to reduce the burden of business rates on business."

Robert Hayton, UK President at the real estate adviser Altus Group, described the measures as "a compelling basket of support which will aid the recovery".

The Chancellor also announced a new investment relief to encourage businesses to adopt green technologies like solar panels. He said: "I’m announcing today that we’ll accept the CBI and the British Retail Consortium’s recommendation to introduce a new business rates improvement relief.

"From 2023, every single business will be able to make property improvements – and, for 12 months, pay no extra business rates."

In a joint statement ahead of the chancellor’s post-lockdown Budget, the Confederation of British Industry (CBI) and 41 other trade groups demanded fundamental changes to the system, which taxes companies based on their premises.

The trade groups that represent more than 260,000 businesses and 9 million employees between them warned that "failure to take action now would weigh on the government’s ambition to create a high-wage, high-productivity and high-investment economy."

Melanie Leech, Chief Executive, British Property Federation, reacted: "The package of measures the Chancellor has announced on business rates relief will bring some welcome temporary relief to our high streets but demonstrate how badly further, fundamental reform is needed.

"While a move to three-year revaluations is welcome, we continue to urgently call for annual revaluations. Businesses need to see long-term reductions in the rates they pay rather than short term fixes. The current practice of downwards transitions needs to end and would give high streets an £8.5bn boost and enable them to forward plan and protect jobs.

"We are pleased that the Chancellor has also responded directly to the BPF’s call for business rates relief to encourage building improvement and to support the transition to net zero. This will give a significant boost to investment in revitalised, more sustainable town centres.”

Transport/Deliveries:

The Chancellor confirmed that the HGV levy, which had been previously suspended until August, will now be suspended until 2023.

Vehicle excise duty for heavy goods vehicles is also to be frozen and a new series of funding was announced to improve lorry park facilities. Sunak also claimed that recent driver shortage and fuel problems have "been caused by rising energy prices and problems with supply chains."

Economy:

Independent forecaster the Office for Budget Responsibility (OBR) has scaled down its assumption of the scarring effect of COVID-19 on the economy from 3% to 2%, Sunak told the Commons.

Devolved administrations will be given the “largest block grants” since 1998, with an increase to Scottish Government funding in each year by an average of £4.6 billion, £2.5 billion for the Welsh Government, and £1.6 billion for the Northern Ireland Executive.

Every Whitehall department will also receive a “real terms rise in overall spending” as part of the Spending Review, amounting to £150 billion over this Parliament.

Free NewsletterVISIT TheIndustry.beauty
cross