Can the Chancellor save the high street?
Business rates will be cut by one third for small retailers as part of the government’s drive to revitalise the UK’s high streets, as announced in the 2018 Budget.
Most retail business with a rateable value of less than £51,000 will see their business rates cut by 33% for two years from April 2019. Whilst the relief is time-limited it should affect around 90% of retail properties and provide some much needed relief around the uncertain period during which the UK is due to leave the EU.
Certain specific reliefs were also announced, including a 100% business rate relief for public lavatories – delivered with a barrage of associated puns from Mr Hammond – and an extension of the £1,500 discount for local newspapers.
The targeted relief for small businesses was accompanied by a spending pledge from the Chancellor of £675 million for a sustainable transformation of British high streets. Some of this money will be spent on a High Streets Task Force to support local leadership, and funding to strengthen community assets, including the restoration of historic buildings on high streets.
The ‘Amazon tax’
Mr Hammond made considerable use of his announcement of a digital services tax – whether or not international legislation will follow in suit – ahead of his statement to parliament.
The details, which, emerged on the day, are for a 2% tax on revenue derived from UK users for certain business activities, such as search engines, social media platforms and online marketplaces. The tax will also only apply to groups that generate global revenues over £500 million a year.
The idea is to capture revenue generated by large tech companies such as Google and Amazon, which pay relatively little tax in the UK.
If you are running a retail business and would like to discuss your rates, and other tax planning opportunities, please get in touch.
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