Philip Hammond’s 2018 Budget has been hailed the “most small-business-friendly Budget that this chancellor has delivered to date”.
A move to ease the business rates burden for small retailers is among the measures to have been welcomed, although there are concerns over the lack of help for larger high street brands.
Yesterday’s (29 October) announcement in the House of Commons included a pledge to cut business rates by a third for properties with a rateable value of up to £51,000, as well as a cut to the contributions smaller firms taking on apprentices will have to make from 10% to 5%, and a freeze on the current VAT threshold for two years.
Reacting to the Budget, the Federation of Small Businesses’ (FSB) Merseyside and Cheshire spokesman, Phil McCabe, says: “FSB has worked hard to make this government listen to small firms and I think this was the most small-business-friendly budget that this chancellor has delivered to date.
“There were positive measures on tax – not least the freeze in the VAT threshold, something we have campaigned for, which will prevent a mountain of bureaucracy and a tax-hike for more than a million businesses. Hopefully this will be just the start in much needed VAT reforms.
“Most significantly, small shops and other businesses on our high streets that cannot get Small Business Rate Relief will be delighted with the significant discount for the next two years, which on average will help these businesses to the tune of almost £2,000 each, potentially up to around £16,000 for small businesses facing the biggest rates bills.”
Richard Roberts, partner and head of retail at law firm Brabners has, however, suggested the government’s business rates relief needs to go further to truly boost the high street.
Describing the welcome relief for small retailers as a “sticking plaster,” he says: “In the long-term, meaningful structural change to the way business rates are calculated is essential to levelling the playing field between bricks and mortar retailers and their online competitors. We will need to wait for the end of the consultation on the UK digital services tax to see whether this will help to redress this imbalance.
“The government must also acknowledge that it’s not just small retailers that are struggling – House of Fraser closing its iconic store in Manchester is proof of that.
“The closure of household name brands and larger department stores is the greatest threat to our high streets. These stores are vital to job creation and help to attract significant footfall that benefits smaller retailers in the local area.
“[Yesterday’s] Budget is a step in the right direction from the government, but the benefit of further funding and tax relief will be short-lived. The outdated and unfair business rates system must be updated so that it works for all retailers – big and small – if we are to keep the high street open for business.”
Aside from moves to strengthen the retail sector, which also featured a £675 million Future High Streets Fund for councils to rejuvenate shopping areas, Caroline Baker, head of Cushman & Wakefield’s Manchester office, was pleased to see the Budget tick “a lot of the boxes that we in the North West are concerned about – housing, our town centres, roads and railways and investment in our cities”.
She adds: “I’m also pleased to see that the Northern Powerhouse was given some airtime, with the chancellor announcing that the government is ready to ‘fire up’ the progress in the regions supported by further funding for The Transforming Cities Fund and the £110m for the Northern Powerhouse Rail Programme.
“But it feels as though the announcements will, in reality, just scratch the surface of the issues and more is needed in all sectors to really stimulate change against a backdrop of uncertainty over Brexit – deal or no deal.”