The Chancellor has announced that a £300m pot has been set aside for local councils to help small businesses face the hike in business rates.
In his Budget Statement, Philip Hammond said that individual areas will decide which businesses should be given the relief.
Further to this, new measures will mean no business losing small business rate relief will see their bill increase next year by more than £50 a month.
Whilst small jewellery businesses will welcome the funding package, some leading figures in the retail industry criticised the gesture as a “drop in the ocean”.
In response to the Budget, Helen Dickinson OBE, chief executive of the British Retail Consortium, said: “We hope that the relief measures will help some of those businesses hardest hit by the revaluation, albeit only temporarily. However, more short term relief measures continue to add complexity to an already impenetrable system.
“£435 million is a drop in the ocean compared with the £25 billion a year that the tax raises. This is yet another sticking plaster on a chronically ill patient – an unsustainable property tax higher here than anywhere in the developed world.”
Meanwhile, Alex Marsh, managing director at Close Brothers Retail Finance, reacted:“Today’s announcement by the Chancellor that small businesses facing rate hikes will receive direct relief from the government in the form of an extra cap, as well as discretionary relief through their local authority, is a step towards supporting small retailers, many of whom have serious concerns as they struggle to factor in the rate rises.”
“With more than a quarter of all retail SMEs in the UK citing high business rates as a one of their biggest challenges in competing with larger retailers – a figure which jumps to 38% among London-based retail SMEs – SMEs need to use all of the tools at their disposal to offset the cost of increases.”
Marsh concluded: “On top of business rate increases, inflation is creeping back up and is adding a further challenge for retailers. Using customer data to increase loyalty and better tailor products and services to consumer needs has never been so critical and UK retailers must respond to this if they want to survive, let alone thrive.”
Image: Getty, Philip Hammond unveils 2017 Budget