Central London businesses and landlords have been left disappointed after a cap on a new business rates discount.
At the dispatch box on Wednesday, Chancellor Rishi Sunak announced a one-year discount of 50 per cent for businesses in the hospitality, retail and leisure sectors.
Eligible businesses will be able to claim a discount on their bills but up to a maximum of £110,000.
The discount would signify a drop in the ocean for central London firms, according to Jace Tyrrell, chief executive of New West End Company.
“For a store in London’s West End, it will result in less than a 1 per cent cut in their business rates bills for just one year,” he said.
The Chancellor also declared that next year’s planned multiplier increase will be cancelled and system property valuations would be reviewed every three years, rather than every five.
Sunak said it would be “completely irresponsible,” to abolish the tax, after firms had called for a radical root and branch reform of the system.
The owners of London bars Cahoots and Mr Fogg’s, Inception Group, have been among the hospitality voices pushing for a radical reform.
Founder and director of Inception Group, Charlie Gilkes, said the bar group was “very pleased” that rates had been slashed. However, he told CityAM the business was awaiting more details on the application of the £110,000 cap.
“It could greatly reduce the benefit for multi-site operators such as ourselves,” he added.
Paul Martin, UK head of retail at KPMG, said the discount cap meant that the announcement was “only a win for smaller players” and had left “large legacy retailers who are most likely to have excess physical space with the same old headache.”
“The issue of business rates has weighed heavily on the minds of retailers for far too long,” he added.
New West End Company’s Tyrell said he hoped Wednesday’s announcement was “not the extent of the fundamental review.”
He added: “Reducing the time between revaluations to three years is welcome, as is the short term relief for investment in improvements and sustainability, but this falls far short of a fundamental review. This simply doesn’t meet the Government’s manifesto commitment to reduce the burden of business rates on business.”
Hospitality bosses were also hopeful that a freeze to the current VAT rate of 12.5 per cent would be declared on Wednesday. The rate is set to return to the pre-pandemic level of 20 per cent next year.
Sacha Lord, night time economy adviser for Greater Manchester, said next spring would “see a surge of operators closing under the weight of the increase.”Internet Explorer Channel Network