Imminent end of business rates relief riles retailers

Retailers have warned they face an £8bn hit after the Chancellor failed to extend a business rates holiday, while airlines pleaded for a cut in passenger duty to help them survive.

A 12-month pause on shops' business rates was brought in when coronavirus struck, giving firms vital breathing space after they were forced to close their doors and reopened to far lower footfall than normal.

From April companies will have to once again start paying rates based on the rental value of properties last assessed five years ago - many of which will be disportionately high due to a plunge in the value of high street real estate as shoppers head online instead.

The Government has already said that the next revaluation will take place in 2023, meaning firms could be stuck with massive bills for years.

Tom Ironside at the British Retail Consortium welcomed Rishi Sunak's additional support for jobs, but warned that the renewed work from home guidance is likely to keep customers away from shops and cafes and put them under further strain.

He said: “Retail is on a delicate path to recovery. The looming threat to this remains the £8bn [annual] business rates cliff-edge from April.

“Retailers need certainty and the Chancellor must take action and bring down the business rates burden in order to avoid unnecessary job losses and shop closures.”

The Treasury pointed out that retail sales returned to their pre-coronavirus levels in August.

Separately Tim Alderslade, the boss of trade body Airlines UK, called for Covid testing at airports and said more tax support is needed.

He said the industry will be unable to recover as long as passengers are made to quarantine for two weeks after entering the UK. The industry is seeking a cut to passenger duty, which is charged on every journey made by a traveller.

Mr Alderslade said: “As airlines enter what will be a brutal winter season the Government should also bring forward a targeted package of support measures, for example a 12-month air passenger duty waiver, to ensure our industry can play a vital role in the economic recovery."

Industry chiefs have been calling for a suspension of the tax since the pandemic hit to help revive a sector brought to its knees.