Business rates bonus

Retailers set to benefit from business rates reductions

A 50% reduction in rates for the next fi nancial year was announced in the Budget.

Most independent retail businesses in England are to get a 50% reduction in their business rates next year as part of a range of measures announced in this year’s Budget.

The new temporary business rates relief will see retail, hospitality and leisure properties receive 50% relief for 2022-23, up to a maximum of £110,000 per business, Chancellor Rishi Sunak announced.

At the same time, Sunak said that the Business Rates Multiplier, which adjusts the annual rates bills upward to account for inflation, will be frozen for 2022–23.

Further changes to the business rates system include a new system of improvement relief, meaning that retailers who invest in their properties will not see a subsequent rise in their business rates for the first 12 months starting from April 2023.

Sunak ruled out scrapping the business rates system completely, a move that had been asked for by many industry bodies, but added that, from 2023, business rates property valuations will also take place every three years instead of every five.

The changes are so far only confirmed for England. The Budget announcements for the devolved governments in Scotland and Wales will take place in December.

Announcing the changes, Sunak said: “We’re taking steps to ease the burden of business rates and boost our high streets.

“The new one-year, 50% business rates discount is a tax cut worth almost £1.7bn and, combined with Small Business Rates Relief, over 90% of all these businesses will see a discount of at least 50%.”

Alcohol duty system to be simplified

Chancellor Rishi Sunak announced a major shake-up of alcohol duties in the recent Budget.

The government intends to restructure alcohol duty so that all beverages will be taxed in direct proportion to their alcohol content rather than having different duty regimes for each type of product. A consultation will be carried out on the reforms with a view to introducing the new regime in 2023. will come down but those on red wine are likely to go up, for example. Reduced rates will apply for products below 3.5% ABV, while a small producer relief will reduce the tax burden on smaller producers of drinks below 8.5% ABV.

Current duty rates on beer, cider, wine and spirits were frozen for another year in the Budget.

Proposed increases in fuel duty were also scrapped, while tobacco duties were increased with effect from October 27th.

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