Business rates in the spotlight ahead of Spring Budget

21 January 2021, 08:43 AM
  • Local shops are calling for government intervention to avoid a “sudden shock” when rates relief comes to an end, as well as a revamp of the entire system
Business rates in the spotlight ahead of Spring Budget

Trade groups are urging action on business rates as the lockdown continues to put local shops at risk. The Association of Convenience Stores (ACS) is calling for chancellor Rishi Sunak to extend the rates discount into 2021/22 so that local businesses aren’t met with high rates bills while still dealing with the fallout from the Covid-19 pandemic.

In a submission of evidence to the Treasury ahead of the Spring Budget on 3rd March, ACS has recommended a minimum 50% reduction in business rates for 2021/22 to avoid a “cliff edge spike” in operating costs.

Meanwhile, the UK’s leading business group has called for action to be taken ahead of the Budget in order to support businesses more immediately.

The Confederation of British Industry (CBI) urged an extension of the business rates holiday for at least three months for firms that are forced to close, and providing support to their supply chains as well. The group also called for the furlough scheme to be extended to the end of June.

“The government must once again stand shoulder-to-shoulder with businesses,” said Tony Danker, CBI director general. “Many tough decisions for business owners on jobs, or even whether to carry on, will be made in the next few weeks. If the government plans to continue its support then I urge them to take action before the Budget, which is still more than six weeks away.”

The Federation of Small Businesses (FSB) told Speciality Food that the situation today with regards to business rates is “all the more pressing as small businesses have faced their toughest year on record”. FSB national chair Mike Cherry says: “They have a mountain to climb to get back on their feet, so extending the business rates discount to 100% for another year is the right thing to do.”

“Crucially, the government needs to recognise that Covid impact is not restricted to just retail, hospitality and leisure properties and so ensure relief reaches not only their supply chains currently excluded, but small businesses right across the country in all our communities and sectors,” he adds.

At the Budget, the CBI recommends that the government goes further by delivering comprehensive reform of the “outdated” business rates system to support struggling high streets.

Since the pandemic began, the government has provided a package of support measures, which the CBI welcomed. Without financial support from the government through rates relief, grants and loans, the ACS says 42% of convenience stores would have had to shut their doors for good.

“The operational challenges of the pandemic are not yet behind us. Local shops are still investing in additional services, Covid-secure measures in store, and increased staffing costs to cover absences, so a sudden shock of high business rates costs, especially for those with high rateable values in city centres that have been hit hard over the last year, could be devastating,” explains ACS chief executive James Lowman.

“Forcing businesses to pay extra business rates at a time when they are barely operating threatens to stop the reopening of the high street altogether, which our economy so desperately needs,” adds Mike Cherry.

By tapering the reintroduction of business rates and providing more relief where it’s needed, the government can help to ensure the recovery of local economies begins as soon as possible.

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