Businesses across the UK, including independent retailers, have largely welcomed the news that plans to cut business rate rises have been brought forward by two years.
The changes will mean that from April business rate increases will be decided by the lower Consumer Prices Index (CPI) inflation measure rather than the Retail Prices Index (RPI).
Chancellor Philip Hammond, who delivered his speech on Wednesday, claims the move will save businesses around £2.3bn over the course of the next five years.
It is hoped that the plans will help ease the burden on the UK’s 5.5m small businesses, which Mr Hammond admitted are currently under pressure.
The British Retail Consortium, which has been lobbying for the move, described the news as “hugely welcome and positive”.
Chief executive, Helen Dickinson, said: “From being caught in a web of competing pressures from all parts of the economy, limiting the scope for action, it’s clear that the Chancellor has listened to the retail industry and the growing chorus from across business and commercial life who have spoken up in favour of action to mitigate rising rates bills.
“Crucially, this relief will unleash investment that retailers want to direct towards the needs of their customers. This will be particularly critical at a time when shoppers’ disposable income is being squeezed further and the growth projections for the economy have been downgraded.”
But others have criticised the Mr Hammond’s announcement for “failing to grasp the nettle stinging businesses”.
John Webber, head of business ratings at Colliers International, said that the Autumn Budget failed to introduce “much needed reform to the business rates system”.
He said: “Business rates are now at an eye watering tax rate of 50% for every £1 of rental value bringing in £25 billion per annum and rising. So, whilst we are pleased the Chancellor has listened to our longstanding call to peg business rate rises to CPI, which at 3% is lower than the RPI 3.9%, it’s a shame the government has taken so long to do this.
“Also, while a 3.9% rise would have resulted in a £1bn extra tax take next April, a 3.0% rise is hardly a tax holiday. It will still mean a £0.75 billion rise for hard pressed businesses in their business rates bill.”