Pledge to cut business rates brings relief to the high street
The Prime Minister has pledged to cut business rates for thousands of retailers, pubs and restaurants across England and Wales to aid under-threat high streets.
The Government has said it will increase the retail discount on rates by a third to 50%, at a cost of £320 million.
High streets have been decimated by shop closures and administrations in recent years as firms struggle to cope with soaring rents and significant business rates.
The Queen told Parliament: “To support business my Government will increase tax credit for research and development, establish a national skills fund and bring forward changes to business rates.”
The policy matches the Conservative’s manifesto commitment to reduce business rates and implement the tax break across shops, restaurants, pubs and cinemas from April.
The tax break will be implemented across more than 400,000 retail properties which have a rateable value under £51,000.
In the manifesto, the Conservatives planned to introduce the rates reduction for the 2020-21 financial year, and said it would only cut total tax receipts by £10 million over the following three years.
The move will be followed at the March budget by a review of the current rates regime.
The Conservatives had already promised in the last parliament to change the revaluation – which determines how big the rates bill should be – from every five years to every three years.
This was slated for a vote, but follow the prorogation of parliament the bill for the new legislation was dropped – despite an estimated £50 million already spent on preparations.
Revaluations are a major sticking point for retailers, with many saying they create an artificially high rates bill.
Earlier this week, Sports Direct’s Mike Ashley called for an overhaul of business rates, pointing out he would have to start closing some unprofitable House of Fraser stores, which pay no rent but have rates bills based on outdated valuations of the properties.
Mr Ashley said on Monday: “All I want to do is pay the right amount of rates. We have stores that are massively profitable that pay too little rates. The rating system is such a joke. It’s so broken and unworkable.”