- UK to reassess commercial property from April 2023
- Support means bills will rise by less than 1% – Govt
- Businesses welcome help, say more reforms needed
LONDON, Nov 17 (Reuters) – Britain will provide 13.6 billion pounds ($16.1 billion) in support to retail, hospitality and leisure companies facing higher business rate bills next year to help them weather the recession and consumer spending. period of declining spending.
British companies have complained for years that the business tax rate – a property tax levied on most commercial properties to fund local services – is outdated and gives online retailers such as Amazon ( AMZN.O ) an unfair cost advantage.
In delivering his budget to parliament, Mr Hunt said he would start a planned revaluation of commercial property from April 2023, which could result in higher commercial rates for some businesses. But he said he would provide temporary support to limit the impact of a surge in inflation.
“I will soften the blow to businesses by cutting taxes by almost £14bn over the next five years. Nearly two-thirds of properties won’t pay an extra penny next year and thousands of pubs, restaurants and high street small Stores will benefit from this,” he said.
Treasury said the package would mean an overall increase in business rate bills of less than 1 per cent, compared to more than 20 per cent without intervention.
The British Retail Consortium, UKHospitality and the British Beer and Pub Association (BBPA) welcomed the relief measures but said more sweeping reforms were still needed.
Kate Nicholls, chief executive of UKHospitality, said: “The current system remains outdated and unfit for purpose. The government has made a manifesto commitment to a thorough review and it is vital that it be delivered as quickly as possible.”
The trade body warned last month that more than a third of the industry was at risk of bankruptcy early next year due to soaring energy costs and rising commodity costs.
Britons also face a bleak economic outlook. With inflation at a 41-year high of 11.1% and consumer confidence near record lows, they are cutting back on spending.
Rising prices will further erode wages and cut living standards by 7% by April 2024, Britain’s budget watchdog said.
The government also said it had decided not to impose a tax on online sales, which some businesses have called for in conjunction with reform of business rates.
The beer industry’s BBPA criticized the decision as reflecting concerns raised about the complexity of the proposed tax and the risk of unfair outcomes between different business models.
“The government doesn’t seem to recognize the utterly outdated nature of the current system,” chief executive Emma McLagin said.
($1 = £0.8463)
Reporting by James Davy; Editing by Alistair Smout and Jane Merriman
Our Standards: The Thomson Reuters Trust Principles.