The Chancellor has rejected calls for a 2% cap on business rates hikes but has extended the small business rate relief scheme by one year.
Announcing his Autumn Statement today, George Osborne also cancelled the 3% fuel duty increase planned for January and cut the main corporation tax rate by 1% to 21%, as of April 2014.
The Association of Convenience Stores (ACS) had campaigned for the annual business rates increase to be capped at 2%, in line with the council tax cap and the government’s own inflation targets.
ACS chief executive James Lowman said Osborne had missed a “golden opportunity”.
“We welcome the chancellor’s announcement of a one-year extension to the small business rate relief scheme, but it will not benefit enough businesses to stimulate the investment needed to revive high streets,” he said.
“The chancellor had a golden opportunity to give some financial certainty and respite to hard pressed businesses by capping the annual rates increase at 2% but he has failed to act. This will be a damaging blow to many local shops who are struggling to stay afloat.”
However, he welcomed the cancellation of the planned 3% fuel duty increase, which would “provide a much needed lifeline for forecourt retailers and will keep costs down for all retailers whose delivery and wholesale costs are significantly affected by the price of fuel”.
He suggested the cut in corporation tax would be overshadowed by rising business rates, energy bills and employment costs. “The challenge facing local shops is how to make taxable profits in the first place,” he added.