Chancellor Rishi Sunak announced a temporary 50% cut in their business rates, up to a maximum of £110,000 per business.
Up to 400,000 businesses in these sectors – including pubs, music venues, cinemas, restaurants, hotels, theatres, and gyms – stand to benefit next year.
The Chancellor has also abandoned 2022’s planned annual increase in business rates for all firms in England for the second consecutive year.
The business rates multiplier usually determines this yearly rise and is tied to September’s inflation rate, as measured by the Consumer Prices Index. But that would have resulted in a 3.1% increase for 2022/23, hammering many of these COVID-hit businesses that are still reeling from the effects of the pandemic.
In conjunction with the existing small business rates relief, Sunak said the move meant more than 90% of all retail, hospitality and leisure businesses in England would see a discount of at least half.
Business rates in these sectors have already been reduced during the 2021/22 tax year, following the rates holiday announced during the pandemic.
From April 2023, all businesses – not just in retail and hospitality – will be able to make improvements to their premises without having to pay extra business rates for 12 months. The reforms also include a new relief for businesses that invest in green technologies, such as solar panels and heat pumps.
The British Chambers of Commerce (BCC) said Sunak’s five-point plan was “good news for many firms”.
Shevaun Haviland, director-general at the BCC, said:
“These changes will provide much-needed relief for businesses across the country, giving many firms renewed confidence to invest and grow.
“However, these changes must be the start, rather than the end point of the reforms to this broken system.”
Get in touch to discuss managing costs.