News that small businesses are to enjoy a rates relief following the recent Budget has been welcomed by retail groups, although caution has been issued at the need for more support.
Chancellor, Philip Hammond, announced in his Budget that small businesses in England with a rateable value of £51,000 or less will see their business rates bill cut by one third, a potential saving for up to 90 per cent of shops, restaurants and cafes. This will be in place for two years until the next business rates re-evaluation in 2021.
While the move has been broadly welcomed, the British Independent Retailers Association (bira), of which the National Association of Health Stores (NAHS) is part of, said that as it had not been announced how the reduction was going to be achieved, it still believes that removing the threshold and introducing an allowance would achieve this effectively – a proposal bira officially launched in the House of Commons in September 2018.
Andrew Goodacre, CEO of bira, explained: “We have worked very hard in the past few months to promote our idea to reduce rates for independent retail businesses. This is a positive move by the Government, but more detail is needed, and quickly, if the high streets are to become a vibrant part of our communities. We hope, therefore, that the Government will continue to work with the sector to ensure that this policy is effectively rolled out and benefits those it is meant to.”
In a statement, the NAHS added: “The NAHS applauds the news that some members could finally see a reduction in their tax burden. A recent NAHS Rates Survey found that the average business rates bill amongst health food store members is £7,249, which calculates to an average annual saving of £2,400 post-Budget.
“Whilst this is broadly welcome, we are, however, mindful that retailers with a rateable value over £51,000 will still be burdened with a business rates system that is currently not fit for purpose and will continue to campaign, alongside bira, for a fairer system.
“Furthermore, where powers to alter business rates lies with devolved administrations in Scotland and Wales, we will be writing to the relevant Ministers to encourage them to mirror the chancellor in setting out their budgets for 2019.”
Bira also welcomed the Government’s proposal to establish a £675m fund to help rejuvenate the high street; with 16 shops closing each day in 2017, it said the fund must be used to bring people back to the high street by addressing parking, public transport and planning issues. People’s shopping behaviours are changing quickly and high streets need to change accordingly by incorporating a vibrant and diversified mix of retail, leisure, services and residential uses.
Goodacre continued: “bira has always promoted high streets as an integral part of our local communities. Independent retail businesses provide the diversity needed on any high street. We welcome the creation of a fund that will help high streets adjust to the future needs of shoppers.”