Autumn Statement: Chancellor must cancel business rates hikes, says Colliers
The Chancellor Rachel Reeves must announce a cancellation of business rates increases at this month’s Autumn Statement if the Government is serious about encouraging growth, Colliers has warned.
John Webber, head of business rates at Colliers, said that if no action is taken, more retail and pub chains will go into administration, exacerbated by the £2.4bn retail, leisure, and hospitality relief which is due to come to an end at the same time.
Business rates are due to increase in April by 1.7%, in line with the September 2024 rate of inflation. For large businesses – which are currently paying 54.6p to the pound – this will come on top of the 6.7% increase they faced earlier this year.
Should the planned increase go ahead, Colliers estimates that businesses in the retail sector will pay over £105 million more in business rates.
Colliers has also called on the Government to announce a plan to reduce the business rates multiplier in the long-term. Business rates currently sit at 49.9p and 54.6p to the pound for small and large businesses respectively, compared to the rate of 34p when they were first introduced in 1990. Colliers said that investor confidence could be restored if the Chancellor announces a long-term plan to reduce the multiplier back to its original rate of 34p.
The firm has also said that reducing the multiplier to an affordable level would preclude the need for many “complicated” reliefs, most of which have been “made necessary by the unaffordable level of tax and to stave of disaster in the short term”.
Other measures Colliers has put forward include the extension of retail, hospitality, and leisure relief until the next reevaluation in 2026, and the extension of empty property rates relief to twelve months and to other sectors.
Colliers has also called on the Government to “round up the cowboys”, referring to business rates advisors who take upfront payments with the promise of lowering rates bills, before disappearing with their fees.
John Webber said: “Labour won the General Election in 2024 promising ‘to abolish the (business rates) tax’ and thereby ‘save the high street’. Given the need to fill the £22 billion black hole, a policy to cut the £30 billion raised would seem to be out of the question, particularly given the state of local authority funding.”
“There has been press speculation that the Chancellor is looking at a lower multiplier for the retail and hospitality sectors- the BRC for example has called for a rates corrector with rates paid on retail property reduced by 20%. Or that she may be considering a targeted tax on the major warehouse distributors in an attempt to level the imbalance between the rates bills paid by physical and online retailers. While we would condone support to the sector, both policies miss the point: that the burden of this tax is just too high on all business sectors.
“We will be waiting with bated breath next Wednesday to see what unfolds.”