To be fair, Rishi Sunak can hardly be said to be a procrastinator, and once he got his mojo last March he was more than prepared to put his hand deeply into all of our pockets, producing rabbits, magic dust and costly glitter by the ton.
However, on the issue of levelling the playing field between the high street and retail online he will announce today (Friday 19 February) that he wants to bypass the budget date of 3 March and leave this as one of the "big decisions" to consider in the November Budget. 00 Sunak must be feeling a little trapped. He needs the £25 billion the Treasury takes in each year from Business Rates. To place this into context; a one percentage point rise in all forms of income tax would raise £5.5 billion. A one percentage point rise in the main rate of VAT would raise £5.2 billion. However, he also wants to promote the high street as the place to go for trainers, books and high-pressure hoses. On the other hand, a two percent tax on online sales, which has been touted as one possible outcome of the review, would raise only £2 billion a year.
Sunak also plans to use the UK’s 2021 presidency of the G7 to push the global case for digital service taxation. This includes a levy on tech giants. This is different to an online sales tax, but addresses the same “physical versus online” issues. There is a G7 Summit at the really very lovely Carbis Bay Estate in Cornwall on 11-13 June 2021, against which rocket launchers can be placed in the Atlantic and we will all then have something different to talk about than a virus and its vaccine nemesis.
Retailers of all sizes are climbing all over his back, screeching for changes to the current Business Rates regime. Mind you, they are also up in arms about the ageing process and photosynthesis, too, so there is little that pleases them. Our own glorious profession has joined the clarion call, Administrators involved in the rescue of many parts of the retail industry have indicated that the lack of clarity over Business Rates is making it much harder for would-be rescuers to don their capes and work the miracles the red-tops demand.
In the meantime, we in the NTI newsroom can confidently predict that the Chancellor will announce a budget extension of the year-long business rates holiday for retail, hospitality and leisure, giving the hard-hit sectors much-needed breathing space. The exemption had been due to expire on March 31 and the budget is on 3 March. It all just ties in nicely. We can then expect a decision on the furlough scheme, which is due to end in April and the “emergency” £20-a-week uplift in universal credit, due to expire at the end of March, is expected to be extended by six months.
Busy times, Mr Sunak.