Chancellor 'poised to reduce planned business rate rise'

Chancellor 'poised to reduce planned business rate rise'

Chancellor Philip Hammond could be set to scrap plans to raise business rates by 3.9% next April.

Following intense lobbying from business groups to reduce the planned £1.1bn increase, Hammond has signalled that he intends to reduce the rates rise in the Budget delivered later this month, according to the Times.

The paper added that Hammond has told colleagues it is important to maintain business confidence in the government while Brexit negotiations are under way.

The business rate rise is currently pegged to the retail prices index of inflation, but the Times has reported that Hammond is poised to use the lower consumer prices index, which stands at 3%.

Giles Clifton, head of corporate affairs at the Booksellers Association, said that the move would be the "right step to take".

"Without decisive action from the Chancellor in his upcoming Budget booksellers face a stark leap in their rates bill from April", he said. "This would have consequences for many booksellers’, for some even their continued viability, and for others it would impact their investment plans, especially for investment in new or refurbished stores in town centres and in less economically viable locations. As the BA has said many times before, the system is in need of radical reform”.

Recent business rate rises have been hugely contentious. Earlier this year, the Booksellers Association warned that the increased business rates which came into effect this April based on property values, could “absolutely cripple” booksellers’ businesses. The revaluated rates meant properties were valued based on their 2015 rental values rather than their 2008 values and some businesses were reported to have seen a rate increase of up to 3,000%.

Bowing to intense pressure from business groups, in March Hammond announced a £300m relief package for the worst-affected businesses. However, there were significant delays to the delivery of this relief.

The chancellor is due to deliver the Budget on 22nd November.