The British Independent Retailers Association (Bira) has welcomed the Budget’s business rates announcements as a win for independent retailers, while warning that the lack of support with employment and energy costs represents a missed opportunity.
Bira, which works with over 6,000 independent retailers across the UK, had campaigned for an increase in Small Business Rates Relief and for other rates rises to be linked to inflation.
According to the announcement, Small Business Rates Relief has been extended to businesses with a rateable value of up to £18,000, up from £12,000. Businesses above that threshold will see rates increases linked to inflation at 3.5% next year, rather than the 25% rise that would have applied without intervention.
The change is expected to take around 70,000 more businesses out of business rates altogether, with half of all shops, restaurants and gyms paying no business rates.
Commenting on the announcements is Bira CEO Andrew Goodacre.
“This Budget has not contained any of the nasty surprises from the past two years. In fact, we are pleased to see Small Business Rates Relief increased by 50%, and all other rates increases next year linked to inflation.
“Bira raised these issues as genuine concerns on several occasions in the run-up to the Budget, and we are delighted that the Treasury has listened. This is a real win for independent retailers. We would rather not have seen any increases at all, and we will push for that next year.”
However, Bira highlights continuing cost pressures for small employers. The announcement states that the National Living Wage and National Minimum Wage will rise by 3.9%, including a 50p hourly increase for workers aged 21 and over, with lower increases for those aged 18 to 20. There were no changes to employer National Insurance contributions or measures to address energy costs.
Goodacre adds, “On the negative side, the lack of measures to reduce the cost of employment and energy is disappointing. Increasing the Employment Allowance would have been a real help to small employers, and this was a missed opportunity.”
The Budget also introduced a £90,000 threshold before VAT is charged on online sales from UK businesses.
“In trying to close one loophole, the government has created another one,” concludes Goodacre. “Finally, we support measures to reduce the impact of the cost of living on the general public, and we hope this boosts consumer confidence as we enter the crucial ‘golden quarter’ for the retail sector.”
For further information on Bira, please click here.