Sunak hails corporate rates ‘central role’ despite £ 7bn cut
Corporate rates will be cut by Â£ 7bn next year, the Chancellor said, as the government again backs down on fundamental reform of the system.
Documents released alongside the spending and budget review this afternoon confirm that boards will be fully compensated for the reduction in corporate rate base following the introduction of new exemptions and a rate freeze. in 2022-2023.
There will be further relief to encourage property improvements by exempting businesses from any consequential rate hikes for one year, while green improvements – such as solar panels and low-carbon heating networks – will benefit also relief. Between them, these reliefs are estimated at 750 million pounds sterling and will support the decarbonization of buildings.
Reliefs for retail, leisure and hospitality will also be increased and eligibility expanded to include hotels, gyms and bowling alleys. This will be worth Â£ 1.7bn while a freeze on the multiplier, which sets the level of rates paid, will be worth Â£ 4.6bn.
The changes followed the government‘s review of business tariffs over the summer, which examined the future of the tax following complaints from businesses that it penalized traditional street businesses. main.
However, Chancellor Rishi Sunak said the review âreaffirms the importance of rates and their central role in the tax systemâ.
In a foreword to the government’s response to the review, Mr. Sunak said, âWhile the government plans to make several substantive changes to improve the system, we see little point in tearing up the system and to start over as suggested by a small minority.
“However, we will continue to examine the arguments for and against an online sales tax which, if introduced, would increase revenue to fund corporate rate reductions. We will consult on this shortly.