With just over a week left until the autumn budget, a cabinet reshuffle could have a serious impact on business rate payers. Despite speculation that Michael Gove could replace Jeremy Hunt as Chancellor of the Exchequer, both have remained in their positions, suggesting that the government is confident with their economic policies.
On the 1st of April 2023, the average national increase for rateable values (RV) in England and Wales was 7.1%. However, BPI has reported that business rates had already risen by 18% in 2022. The 2022 autumn budget saw the introduction of a number of measures to support businesses, including freezing the multipliers at 51.2p (standard multiplier) and 49.9p (small business multiplier).
The inflation-linked increase is expected to come into play later this month, which could cause business rates bills to rise by over £1.5 billion. Business leaders have called on the government to intervene before the increase takes effect.
Anthony Hughes of RVA Surveyors stated: “When major shifts happen in politics, we need to sit up and pay attention. Especially when we are so close to events like the autumn budget. Incoming policy changes could make or break so many over this holiday period alone.”
David Kelly, Head of Insolvency at PwC, added: “[…] Looking ahead, unfortunately we expect the number of insolvencies to remain high in the final months of this year, with no sector immune from the prevailing external challenges.”
Amidst speculation that Gove could be removed from his role as Secretary of State for Levelling Up, Housing and Communities, Hughes commented: “Cabinet reshuffles can bring a sense of dread, because you don’t know who’s going to take over a position, or even if they’re qualified for it. Right now, announcements on business rates policy for the autumn budgets is unlikely to change from what we think it’s going to be. That’s what we in the rating industry are focusing on. An additional bill of over £1.5 billion is the last thing commercial property owners and tenants need.”
With the shock return of political heavyweight David Cameron, and no indication of an imminent change in policy, business rate payers remain in limbo as to what the future holds.
With the autumn budget less than ten days away, the potential ramifications of a cabinet reshuffle are beginning to be felt by business rate payers. Reports that Michael Gove could replace Jeremy Hunt as Chancellor of the Exchequer have so far proved unfounded, but the government’s silence on the issue is causing concern.
The 2022 autumn budget saw a number of measures to support businesses, including freezing the multipliers at 51.2p (standard multiplier) and 49.9p (small business multiplier). However, the inflation-linked increase is set to come into play later this month, which could cause business rates bills to rise by over £1.5 billion.
Anthony Hughes of RVA Surveyors commented: “When major shifts happen in politics, we need to sit up and pay attention. Especially when we are so close to events like the autumn budget. Incoming policy changes could mean make or break for so many over this holiday period alone.”
David Kelly, Head of Insolvency at PwC, added: “[…] Looking ahead, unfortunately we expect the number of insolvencies to remain high in the final months of this year, with no sector immune from the prevailing external challenges.”
The return of political heavyweight David Cameron has led to speculation that a more experienced political figure may take on the bulk of business rates policy. However, with no indication of an imminent change in policy, business rate payers remain uncertain as to what the future holds.
