Today, chancellor Philip Hammond announced a handful of measures intended to cushion the blow of business rate rises this year, including a £300m relief fund that will be distributed to local authorities.
In addition, Hammond said small pubs will get a £1,000 reduction on their business rates bill this year, a handout that will help approximately 36,000 pubs. A further 16,000 businesses will benefit from a £50 per month cap on bill increases for businesses coming out of small business rates relief.
But not everyone is cheering on the chancellor, with many saying that more fundamental reform of the system is necessary, given how much businesses are forced to pay in property taxes in the UK.
Keith Cooney, head of business rates at Knight Frank, said:
The chancellor also announced yet another review of the business rates system which is set to report before the next revaluation in 2022.
This has become a ground hog day event at every Budget for the last five years. On every occasion, including today, the government throws a spanner in the process by insisting they have to be revenue neutral which is ignoring the fundamental problem that business rates are now the largest property tax in Europe.
“We welcome the desire to review the business rates system more broadly – it is a 20th century system not fit for a 21st century economy," said Stephen Herring, head of taxation at the Institute of Directors. "However, the transitional ‘relief fund’ looks distinctly modest at first glance, and ensuring the system isn’t overly bureaucratic will be crucial."
Read more: New £300m fund for business rates relief
Edward Cooke, chief executive of retail property body Revo, said: “In his speech the chancellor seemed to reference the importance of creating a tax system that takes into account the changing nature of the retail market.
"But there is scant evidence that his or his advisors' thinking has moved beyond this basic fact. Indeed, in the Budget Red Book business rates are forecast to increase by £4.2bn over the next four years, which doesn’t feel like they have understood the impact this punitive tax is having on investment in our towns and cities."