The Autumn Statement 2022 comes at a time of significant economic challenge for the UK economy.
The statement focused on three key areas: stability, growth and public services.
The context set out by the Chancellor included:-
- The Office for Budget Responsibility has confirmed the UK is already in recession and expected to shrink further.
- The Chancellor said global factors are the primary cause of the current inflation, energy and economic crises.
Following the announcement, the government have released a Business Rates Factsheet.
The government is seeking to protect the High Street from rising inflation and to level the playing field between ‘Bricks V Clicks’ to address the tax imbalance for high street retailers. They have made the following commitments:
- Freezing the business rates multiplier for another year to 2023/24
- An extended and increased relief for retail, hospitality and leisure businesses from 50% to 75% for 2023-24
- Protection for small businesses who lose eligibility for either Small Business or Rural Rate Relief due to new property valuations
- Total business rates paid by the retail sector is estimated to fall by 20%, but will rise by 27% for large distribution warehouses to reflect the growth in the online sales sector.
This package is estimated to mean that the total increase in business rates bills will be less than 1%, compared to over 20% without intervention.
You can also find the future rateable value for your property and get an estimate of what your business rates bill may be from 1 April 2023 here.
- The Government will proceed with revaluation for business rates taking effect in April 2023. To protect businesses from rising inflation the multiplier will be frozen in 2023-24 while relief for 230,000 businesses in retail, hospitality and leisure sectors will be increased from 50% to 75% next year.
- This limits bill increases for the smallest properties to 5%. Businesses seeing lower bills as a result of the revaluation will benefit from that decrease in full straight away, as the Chancellor abolished downwards transitional reliefs caps.
- Following the recent consultation on an Online Sales Tax (OST), the government has decided not to introduce such a tax. The idea of an OST was put forward by certain stakeholders to “rebalance” the business rates bills paid by in-store retailers in comparison to their online counterparts.
- Small businesses who lose eligibility for either Small Business or Rural Rate Relief as a result of the new property revaluations will see their bill increases capped at £50 a month through a new separate scheme worth over £500 million.
WIDER BUSINESS MEASURES
- Employment allowance will be maintained at the higher level of £5,000.
- The Chancellor says businesses will be provided with additional support next year for cost-of-living.
- The “national living wage” will rise by 9.7% next year to £10.42 an hour.
- Tariffs will be cut to support business supply chains.
- Investment zones will be kept, centred on universities in “left behind areas” to help build growth clusters, with further announcements at the spring budget.