The Times reported that the March 3 budget will move the stamp duty holiday to the end of June in order to bring it into line with the easing of lockdown restrictions. It was originally due to expire on March 31. The scrapping of business rates will also be extended from a March 31 deadline, according to the Financial Times, (something the Scottish Government has already done) but the Tory “Red Wall” MPs who formed the Northern Research Group are urging wider reform than this.
The Government currently calculates retail business rates by multiplying a figure based loosely on the rental value of the property by the business rate multiplier (a figure which is currently 49.1p for a small business and 50.4p if it’s large). This means the average tax is around 50% of the rental value. In 1990 when the tax was brought in the average rate was 35%.
Forty-five Tory MPs have now written to the Chancellor asking him to cut business rates back to 1990 levels. Research from WPI Strategy suggests 25 of the top 35 constituencies in England and Wales affected by the highest business rate burden are in the North of England which include many recently won Conservative seats like Leigh, Bishop Auckland, Grimsby and Rossendale and Darwen, the seat of Northern Research Group Chair Jake Berry MP.
But what does this mean for a Chancellor who seems to want to raise taxes to balance the books? Rishi Sunak has planned a review of business rates (now delayed until Autumn) in which the Treasury confirmed an online sales tax will be considered. Will he reduce the burden on high streets and force Amazon to pay more? Perhaps it takes a ex-Goldman Sachs banker with billionaire in-laws to roll back globalisation.
Enjoying The Critic online? It's even better in print
Try five issues of Britain’s newest magazine for £10Subscribe