Members of our Editorial Board have begun giving their reactions to Chancellor Rachel Reeves’ Autumn Budget.
David Parker, head of rating at Savills, began by addressing the business rates changes. He said: “The need to assist smaller businesses is undoubtedly acute and this measure goes some way to addressing that in part, but general business rates bills are unpopularly high, and have been for many years and so whilst the introduction of 40 per cent tax relief for retail, hospitality and leisure properties up to a maximum of £110,000 per business is welcome, it is a reduction from the previous 75 per cent relief, which will disappoint many.
“The annual multiplier in 1990 was 34.8p, meaning the annual bill was hypothetically 34.8 per cent of a property’s rateable value. With it now approaching 60p (or 60 per cent) of a rateable value for some properties, it’s disappointing that the funding of the relief to smaller businesses is at the direct expense of larger businesses.
“An alternative solution could have seen a uniform reduction to the annual multiplier of 20 per cent to 30 per cent across all properties, which would have immediately addressed many of the complaints regarding high business rates. This approach would have also created a property tax which is efficient and, in general, fair as it is self-levelling based on the amount of rent a business is willing to pay in order to occupy its premises.”
Dan Channer, group managing director for Haslams Estate Agents, said: The Budget is more benign than we predicted, albeit with a nasty kick for Buy-to-Let investors.
“The decision to increase the additional rate of stamp duty land tax from three per cent to five per cent is part of a deliberate move by the Government to shrink the private rented sector.
“Be careful what you wish for – rental supply reduced by one per cent as a proportion of total homes between 2019 and 2022 which led to rents increasing 15 per cent in two years after Covid.
“The much-trailed increase in capital gains tax (CGT) on shares seems reasonable and there is no change in CGT for property sales, which we support. Many clients have paused plans before the Budget and expect activity to pick up in the next month.”
More to follow.
Image: Lauren Hurley / No 10 Downing Street, OGL 3 <http://www.nationalarchives.gov.uk/doc/open-government-licence/version/3>, via Wikimedia Commons
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