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Business Rates: The Real Threat to UK Stores
When the Chancellor rolls out her Autumn Budget next week, she’ll need to dismiss the looming business rates hikes slated for next April. If she’s really gearing up to boost growth across the UK—especially the high‑street heartland—she can’t afford to let those rates pile up any longer.
Why the Current Plan is a Recipe for Retail Ruin
- Retailers are already skirting the brink. With £2.4 billion in Retail, Leisure & Hospitality Relief about to run out, any additional tax drag will push many stores into administration.
- Pub chains feel the sting too. The same financial squeeze applies to pubs that are keeping the community spirit alive. Stressors on one front inevitably ripple across neighboring sectors.
- High Streets are feeling the burn. As these businesses falter, small towns and bustling city centres will see a gradual erosion in footfall, sales, and local pride.
The Bottom Line
In short, the Chancellor’s next move could dictate whether the UK’s beloved high streets survive a tax storm or sacrifice—like a cold coffee in a rain‑shower—under buoyant growth prospects. To keep the storefronts open and the pubs buzzing, the rates rise simply has to be cancelled or slashed.
Cancel the planned business rates increases in April 2025
Why UK Businesses Are About to Feel the Tax Weight (and It’s Not Just a Dry Numbers Game)
Inflation’s Bumpy Road to the Bank
In September 2024, the pound’s jump was a solid 1.7% hike – enough to make your coffee shop’s margins do a little dance. And that’s just the start. Bigger firms last year already chalked up a whopping 6.7% increase, piling on a multiplier of 54.6p for every pound they earn.
Guess Who’s Going to Pay Extra?
Good news: the good news is that it’s not just a trick. On April 1, 2025, 220,000 businesses will pay an additional £0.5 bn in tax. Gap‑closing that figure is the same as a small country’s entire GDP… but in one small change of schedule.
Sector‑by‑Sector Breakdown (and Where Your Day‑Job Might Sink)
- Retail: £105 million extra. Picture a supermarket checking your loyalty card and realizing you’re owed an extra cash clip.
- Offices: £115 million more. Your cubicle might suddenly feel like a bank vault.
- Logistics/Industry: £135 million added. When trucks hit the dials, the weight gets heavier than your lunch.
Big Companies? Big Burden.
Already munching on more than 75% of the business rates pie, larger firms are in for a hit that might dent the reputation of a UK PLC or dampen the economy. Think of it as a financial rough patch that could slow the next wave of growth.
Takeaway – What This Means for You
Whether you’re a shop owner, a corporate board member or just a shop‑hopping poet, the uptick in rates will ripple through the UK’s business landscape. As price tags rise, the overall economy may hit pause. So grab a cup of tea, keep the sprinklers; plus, do a quick check if anything slight needs tightening. It’s not the end of the world – just an extra bite in the budget that everyone must swallow.
Announce a plan to reduce the multiplier long term
Business Rates Inflation and the Need for Revision
The Problem: An Over‑charged Multiplier
Business rates today are built on a multiplier that’s higher than it ever should be. The UBR used to calculate those bills is dragging the cost up for everyone, from start‑ups to established firms.
What It Looks Like for Real‑World Companies
- Small Businesses face a multiplier of 49.9p—a steep hike from the 34p introduced in 1990.
- Large Enterprises see it climb even higher to 54.6p. It’s like paying a double‑topping pizza before the restaurant has served any pizza.
The Stark Reality
These rates aren’t linked to performance; they’re flat‑fee bills that pop up regardless of whether a business has made a single pound of revenue. Imagine being told you must pay for a car before you even get your driver’s licence.
Investor Confidence and the Chill Factor
What the Chancellor could do is dramatically cut the multiplier back to the 34p floor. By re‑baselining the UBR, the bill would instantly feel more affordable—and investors would notice the shift. It’s the kind of move that could re‑ignite confidence across the UK’s business landscape.
A Sunny Proposal
The proposal is simple: reduce the UBR to 34p, then recalibrate all existing bills to a fairer level that every company can realistically afford. No one should be paying more for their office space than necessary.
Why This Is Unique Worldwide
In no other European country do businesses suffer a tax that’s half the rental value of their premises. The current level is a major deterrent to fresh investment in the UK, stifling the growth and innovation that our economy needs.
The Calmer Path Forward
Lowering the UBR would encourage:
- New investment that sees a clear payoff path.
- Business expansion without the fear of mounting rates.
- Innovation spurred by a more approachable cost model.
By aligning the multiplier back to its original, reasonable rate, we could give UK firms the breathing room needed to thrive.
Review Reliefs
Crunching the Tax Multiplier: Let’s Make It Work for Us
When the tax multiplier shoots up like a bad fireworks display, businesses scramble for relief. That’s why slashing it down to a more realistic number is the secret sauce that keeps the economy from blowing up—at least for the short‑term.
Why the Reliefs Are a Rough Ride
You’ve probably heard the word “relief” all day. It sounds like a spa day, but in reality it’s a patchwork of loopholes that were put in place because the tax rate was simply too high. They’re the emergency rooms of the fiscal world—necessary, but not always the best long‑term solution.
Business Rate Deserts
- Almost a Third of U.S. Businesses (700,000 of 2.1 million) are living in “no‑rate” zones.
- These companies benefit from the same public services that keep everyone running smoothly: schools, roads, emergency services.
- But they’re not paying a single cent into the maintenance budget.
The Fair Share Principle
Imagine a city party where you get a free pizza slice. If you’re enjoying the disco lights and the music, it’s only fair that you help put on the lights…or at least tip a tiny amount.
That’s the idea: everyone who benefits should contribute a fair and reasonable amount to keep the lights on.
A Recurring Check‑In
Relief isn’t a one‑time fix. Governments should review these measures every three years—like doing a periodic dance check—to make sure they’re still relevant and aren’t collecting gold from households that no longer need it.
Bottom Line
Cutting the multiplier does two things: it keeps tax bands affordable, and it eliminates the need for a circus of madness that business owners have to juggle just to stay on the board. Simpler, fairer, and with fewer headaches. And that’s a win for everyone.
Extend retail, hospitality and leisure relief until the next revaluation in 2026
Chancellor Keeps the 75% Relief Boost—But for…a Shorter Time?
The recent move by the Chancellor to extend the generous 75% relief for retail, hospitality, and leisure has been a relief (no pun intended) for many businesses. In the short run, patrons in pubs, restaurants, cafés, and small shops feel less pinched by the tax‑post. But that “temporary” roof is set to be reviewed every annually, which leaves many owners staring at an uncertain horizon.
Why the “Annual Review” is a Real Head‑Crusher
- One‑Year Forecasting Limit: Planning for a monthally or quarterly cycle is déjà vu; but thinking beyond a year becomes a wild goose chase.
- Fingers on a 75% Cliff: Expecting a sudden jump in the rates bill next year can feel like standing on a cliff edge. Even a chair‑wobble can bring the anxiety.
- Revenue Crunch: A sudden 75% spike might slam the revenue wheel, forcing owners to pull the business guard‑rail down.
Chancellor’s “Confidence” Mandate
You know that feeling when your bank account says “Hold on… Hang on…”? That’s exactly what small businesses long for when it comes to tax relief. A quick, decisive statement from the Chancellor that the 75% relief will remain sticky until the 2026 re‑valuation would give them a solid anchor to plan better.
In short, extending the relief is great—just keep the sky from turning into a flash‑of‑infinity. A fixed commitment till 2026 would let owners lean into future plans, trade in fear of a cliff over “what if” drama, and maybe even add a dash of cozy optimism to the next big menu or shop redesign.
Extend Empty Property Rates Relief to Twelve Months and to Other Sectors
Longer Empty‑Property Breaks: A Reality Check for Tenants and Landlords
Every landlord knows the feeling: the office block sits vacant, the retail space is ticking off a silent alarm, and the landlord’s bank account is slowly bleeding. Current regulations give only a three‑month or six‑month “empty‑property holiday,” but the real world is a stubborn 12‑month waiting game.
Why the Short Breaks Won’t Cut It
- Finding the right tenant takes time. In the private sector, landlords often have to sift through countless applicants before landing someone who matches their rental criteria.
- Fluctuating markets add unpredictability. Economic shifts can turn a once‑hot sector into a dry spell, making the 3‑ or 6‑month window insufficient.
- Costs pile up. Heating, security, and maintenance don’t stop just because a lease hasn’t been signed.
Proposed Fix: A 12‑Month Extension
The Chancellor should consider extending the holiday to a full year for all property types – offices, retail, and beyond. This change would:
- Level the playing field. Both landlords and tenants would have equal breathing room.
- Reduce financial strain. Longer breaks mean more time to assemble the right tenant without the pressure of sudden cash flow.
- Encourage smarter tenancy deals. With more time, landlords can enforce stricter checks, leading to more reliable occupants.
In a world where vacancies can last a whole year, it’s high time the policy caught up with reality. Let’s give everyone a fair shot to find the perfect match – no more short‑sighted holidays that leave landlords floundering.’’
Round up the cowboys
Business Rates Advisers: The Lone Wolf of Finance Advice
When it comes to business rates, you’ll find that a handful of advisers don’t even need a licence to tell you how to spend your money. That’s a double‑edged sword – while it keeps things flexible, it also opens the door for the so‑called “cowboy” advisers who thrive on small companies’ confusion.
Small Firms and the Wild West of Rates
- Many tiny businesses can’t navigate the murky twists of the system on their own.
- These clever sales tactics often involve a hefty upfront fee, promising to slash rates bills.
- In reality, the adviser vanishes once the money disappears.
The Non‑Domestic Rating Act 2023 is tightening the screws: it forces many small firms that were previously out of the loop to update their VOA whenever there’s a change to their property. Worse, it adds a new “Duty to Notify” that’s nothing but another hurdle.
What Should the Government Do?
We need a hard‑line response. Launch a consultation to uncover how rogue advisers operate and devise ways to crack down on them. The best move? Creating a register of professional rating advisers. It’s a simple way to separate the honest folk from the charlatans.
Labour’s 2024 Victory and the Tax Quandary
Labour’s promise to “abolish the business rates tax” felt like a life‑saver for high street shops. Yet they face a colossal £22 billion gap that needs funding. Pulling the rug entirely would just cripple local authorities.
Rumours are swirling that the Chancellor might be tweaking the multiplier for retailers and hospitality or even imposing a special levy on big warehouse distributors to level the playing field between brick‑and‑mortar and online shops. The problem? Everyone’s paying a brutal tax.
It’s All About the Weightage
Applicants are clamouring for a 20% reduction on retail property rates – a voice echoed by the BRC. Still, it doesn’t address the core issue: the tax burden is excessive for all sectors.
We’re waiting in suspense for next Wednesday’s announcement. Stay tuned.
