Local retailers in England could find it easier to expand after the UK Government published its business rates interim report, which states that the Chancellor will explore fixing sudden jumps in business rates – known as “cliff edges”.
Currently when a business opens a second property, they lose access to all Small Business Rates Relief (SBRR), holding businesses back from expanding. That means that a shop in England would have to pay thousands of pounds more for opening a second outlet in the next village. The report confirms that the government will review how SBRR can support business growth, potentially lifting growth and living standards in the future for those who work in these small businesses.
Additional measures considered in the report include enhancing Improvement Relief, delivering meaningful Transitional Relief in 2026 to support those seeing large rateable value increases, and using the upcoming merger of the Valuation Office Agency with HMRC to support ratepayers. The Government has also ruled out more frequent revaluations in the report on the basis of feedback from stakeholders.
The Association of Convenience Stores welcomed the news. Chief executive James Lowman said: “It’s encouraging to see the Chancellor talking about reform of the business rates system to encourage growth, aligning with many of the measures that we’ve asked for to support local shops. Addressing the cliff edges on small business rate relief would mark a positive step forward, but with retail and hospitality relief likely coming to an end next year, there is more to do to ensure that retailers are not unnecessarily hampered by excessive rates bills.
“We continue to urge the Chancellor to use the Budget to announce a full 20p reduction in the new permanent retail, hospitality and leisure multipliers, which will go a long way to providing businesses some level of certainty at a time when they’re staring down the barrel of increases as a result of the incoming rates revaluation.”
Earlier this week, ACS wrote to the Chancellor outlining a number of measures that could be taken to support local shops through the rates system, particularly those who invest in growing their business. The recommendations to the Chancellor include:
• Utilising the full 20p reduction in the new Retail, Hospitality and Leisure multiplier
• Increasing small business rate relief thresholds in line with increases in rateable values
• Extending improvement relief from 12 months to three years and including plant and machinery in the eligible investment for improvement relief
• Removing CCTV from the rating list so that retailers don’t pay twice for making their stores more secure