Chancellor Philip Hammond’s Spring budget was meant to squash the doom and gloom and present a picture of hope for the British economy, with a forecast that envisaged more growth coupled with less inflation and debt in the year ahead.
For the retail sector his March 13 speech set a new date of 2021 for the business rates revaluation and a reduction in time between subsequent revaluations so they happen every three years instead of every five.
BRC CEO Helen Dickinson welcomed some of the measures, which also included a digital tax and waste reduction goals, saying: “We’ve consistently called for more frequent revaluations and welcome the Chancellor’s decision to move forward the next revaluation by a year to 2021 as a step in the right direction.
“More frequent revaluations are no easy task and require strong collaboration and exchange of information jointly between the Valuation Office and ratepayers.”
The budget statement also acknowledged the business rates disparity between online retailers and bricks and mortars stores.
Reacting to the impact of the March 13 Spring statement on the UK Retail sector, GlobalData Retail Research Director, Patrick O’Brien, commented:
”Philip Hammond trailed his Spring Statement as an event free speech and he did not disappoint. While the upbeat signals beforehand hinted that the OBR would be backtracking from the savage downward revisions to the economic forecasts it made in November last year, instead it made only a 0.1ppt increase to GDP in 2018 which was outweighed by decreasing forecasts 0.1ppt in both 2020 and 2021.
“The data does point to a slightly better near term picture for retailers though, with inflation falling leading to an increase of 1.2% in real household disposable income in 2018.
On the perennial problem of business rates though, the only help was the bringing forward of the next revaluation to 2021, which will be little help to struggling retailers about to be hit by increased rate bills next month.” Some 55,000 retail businesses are expected to see their rates rise.