Trade groups and experts call for business rates relief next year

Trade groups and experts have called on the Government for business rates relief next year as shops prepare for a multibillion-pound tax bill.

The Government has said it will freeze the business rates multiplier – which typically increases rates bills by inflation – from next April for the financial year.

Businesses in England will not see a previously announced £159.4 million increase to their rate bills as a result.

The Treasury also said it is looking at options to support businesses in hard-hit sectors, such as retail and hospitality, after introducing a business rates holiday for the current financial year.

However, the Office for Budget Responsibility (OBR) said UK business rates will jump by £12.8 billion after the rates holiday ends.

The watchdog said the sharply increased tax burden for retail, hospitality and leisure firms hit hard by the virus “represents one material pressure on company finances that could affect the recovery”.

Emma McClarkin, chief executive of the British Beer & Pub Association, said: “Not only is the Government unfairly rendering pubs unviable or forcing many of them to stay closed this Christmas, it isn’t even giving them the full financial support they need to survive.

“Whilst the news of a review of business rates reliefs in the new year is a glimmer of positive news, it is not nearly enough.”

Helen Dickinson, chief executive of the British Retail Consortium, said: “We are encouraged that the Government is considering options for further rates relief for businesses affected by Covid.

“Many retail businesses have been shuttered for the past month, depriving them of £8 billion in sales.

“A return to full business rates liability in April would be impossible for some firms to meet and freezing the multiplier in 2021-22 does not solve this problem.

“The Government should adopt our proposal for business rates relief at 50% which reflects the fall in retail property values and brings market reality into the system, while generating much needed revenue for the Treasury.”

Robert Hayton, head of property tax at Altus Group, said: “Freezing rates is the right thing to do but that measure will be insufficient and rateable values used to determine bills, which are under appeal, must now be significantly reduced quickly to reflect the impact of the coronavirus.

“Settlement of those appeals must take place ahead of the next financial year and before new bills are issued.”