17 November 2022

The NHBF is pleased that the Government has answered the NHBF’s call for further business rates support, increasing the discount from 50% to 75% in 2023/24, in addition to freezing the multiplier and the transitional relief scheme (i.e., ensuring your rates go up in affordable steps).

But those businesses already finding it difficult to afford taking on more apprentices and staff will find the rises to the National Living Wage make it even harder. We are disappointed that the Government has decided not to go ahead with the Online Sales Tax, which would have gone some way to levelling the playing field between high street-based and online businesses paying less tax.

Hair & beauty businesses are deep in a fight for survival and the willingness of the Government to continue support for energy bills and the next phase of the Energy Bill Relief Scheme (EBRS) will be crucial.  Energy is the first or second largest overhead for salons, so that decision, when it comes, may determine whether it’s game over or not for many business at the heart of the high street and their community.

Factsheet covering Autumn Statement 2022.

Key points of interest to the sector:

  • Business Rates - Retail, Hospitality and Leisure Relief: Support for eligible retail, hospitality, and leisure businesses is being extended and increased from 50% to 75% business rates relief up to £110,000 per business in 2023-24. Around 230,000 RHL properties will be eligible to receive this increased support worth £2.1 billion.
  • Business Rates (Overall Package): From 1 April 2023, business rate bills in England will be updated to reflect changes in property values since the last revaluation in 2017. A package of targeted support worth £13.6 billion over the next 5 years will support businesses as they transition to their new bills.
  • Business Rates - Multiplier Freeze: The business rates multipliers will be frozen in 2023-24 at 49.9 pence and 51.2 pence, preventing them from increasing to 52.9 pence and 54.2 pence. This is a tax cut worth £9.3 billion over the next five years. This will support all ratepayers, large and small, and mean bills are 6% lower than without the freeze, before any reliefs are applied.
  • Business Rates - Transitional Relief Scheme: Upwards Transitional Relief will support properties by capping bill increases caused by changes in rateable values at the 2023 revaluation. This £1.6 billion of support will be funded by the Exchequer rather than by limiting bill decreases, as at previous revaluations. The ‘upward caps’ will be 5%, 15% and 30%, respectively, for small, medium, and large properties in 2023-24, and will be applied before any other reliefs or supplements.. The 300,000 properties with falls in rateable values will see the full benefit of that reduction in their new business rates bill from April 2023. Over the life of the 3-year list the scheme will support around 700,000 ratepayers.
  • Business Rates - Supporting Small Business Scheme (SSBS): Bill increases for the smallest businesses losing eligibility or seeing reductions in SBRR or Rural Rate Relief (RRR) will be capped at £600 per year from 1 April 2023. This is support worth over £500 million over the next 3 years and will protect over 80,000 small businesses who are losing some or all eligibility for relief. This means no small business losing eligibility for SBRR or RRR will see a bill increase of more than £50 per month in 2023-24.
  • Business Rates - Improvement Relief: At Autumn Budget 2021, the government announced a new improvement relief to ensure ratepayers do not see an increase in their rates for 12 months as a result of making qualifying improvements to a property they occupy. This will now be introduced from April 2024. This relief will be available until 2028, at which point the government will review the measure.
  • Dividend Allowance: The government will reduce the Dividend Allowance from £2,000 to £1,000 from April 2023, and to £500 from April 2024.
  • Levelling up funds: The Autumn Statement confirms that the second round of the Levelling Up Fund will allocate at least £1.7 billion to priority local infrastructure projects. Successful bids will be announced before the end of the year.
  • VAT threshold: The Autumn Statement maintains the VAT registration threshold at £85,000 for two years from April 2024.
  • National Insurance contributions Secondary Threshold: The government will fix the level at which employers start to pay Class 1 Secondary NICs for their employees (the Secondary Threshold) at £9,100 from April 2023 until April 2028.  The Employment Allowance means that 40% of businesses do not pay NICs and will be unaffected by this change. The government will legislate for this measure in affirmative secondary legislation in early 2023.
  • Corporation tax/small profits rate: 70% of actively trading companies will not see an increase in the rate of Corporation Tax they pay due to the Small Profits Rate.
  • Online Sales Tax: Following consultation, the government has decided not to introduce an OST, an idea put forward by certain stakeholders in the context of Business Rates reform. The government’s decision reflects concerns raised about an OST’s complexity and the risk of creating unintended distortion or unfair outcomes between different business models.