// Chancellor Rishi Sunak unveils a raft of measures to reduce business rates
// The changes are likely to be welcomed by retail chiefs, although there will be some disappointment that there has not been a fundamental overhaul of the system
Rishi Sunak has temporarily reduced business rates in a reprieve for thousands of Covid-hit retailers and is drawing up plans for the levy to be replaced with an online sales tax.
The Chancellor handed a 50pc rates discount worth £7 billion to high street shops, pubs and restaurants hammered by the pandemic, in the biggest cut to the tax in 20 years.
However, he insisted it would be “wrong” to give in to demands from Labour for the rates system to be scrapped altogether unless it can be replaced with another source of revenue as they are worth £25 billionn.
READ MORE:
Instead, Sunak revealed “key reforms” where there will be more frequent revaluations, every three years, which he said would make the system fairer.
Investment relief will be available to reward green initiatives, such as the installation of solar panels, as well as improvement relief which will be offered for 12 months following enhancement of premises – the latter lobbied for by the BRC and other business groups.
Mr Sunak is now drawing up a consultation on an online sales tax which would replace income lost from rates reform as part of a wider shake-up.
Subak also cancelled next year’s planned increase in the business rates multiplier and said businesses in retail, hospitality and leisure would be entitled to a one-year business rates discount of 50 per cent.
British Retail Consortium chief executive Helen Dickinson said: “Today, the Chancellor spoke of a new age of optimism, but retailers will struggle to share his confidence after a Budget that does not do enough to reduce the burden of costs bearing down on our shops, our high streets and our communities.
“This budget is a missed opportunity for retail and the three million people who work in the industry, and it prevents retail from maximising its contribution to the government’s levelling up agenda.”
Click here to sign up to Retail Gazette’s free daily email newsletter
