UK business leaders have urged the government to scrap the inflation-linked increase expected in the upcoming 2023 autumn budget on November 22nd. This has been a growing concern for commercial property owners and tenants, with the average national rateable value (RV) increase for England and Wales in 2023 being 7.1%.
Anthony Hughes, Managing Director at RVA Surveyors, commented on the situation: “This is something everyone in the rating industry has been following for a while. With the decrease in spending for businesses and consumers, the knock-on effect is that even with the typical spike in holiday trading, this won’t necessarily equate to keeping businesses afloat. The government need a strong plan that gives businesses the support they need – not a bill worth more than £1.5 billion looming over their heads.”
Kate Nicholls, Chief Executive of UKHospitality, added: “The freezing of rates and extended relief could be the ‘lifeline’ needed for the hospitality sector.”
Business rates are often the third or fourth biggest expense for any commercial property owner or tenant. Currently, inflation is measured against the Consumer Price Index (CPI) and indicates to government by how much they should raise business rates by in the next financial year. Multipliers are currently at the highest level since they were introduced in 1990, and the Retail Hospitality and Leisure (RHL) relief is set to end at the same time. UKHospitality has projected that the jump in tax bills paid by pubs, restaurants, and hotels alone will be around £234m, and a further £630m if RHL and other support is removed.
With the 2023 autumn budget just around the corner, business leaders have expressed their concern for the future of commercial property owners and tenants and the financial burden they are facing.
Derick is an experienced reporter having held multiple senior roles for large publishers across Europe. Specialist subjects include small business and financial emerging markets.