The Chancellor Jeremy Hunt has extended business rates relief for the retail sector for another year.
The scheme offers companies up to 75% discounts on their business rates bills, with a cap of £110,000 per company.
It was designed to help retailers suffering from the government-imposed lock downs throughout the pandemic, and was due to expire in 2024.
The £110,000 cap means larger multiple retailers benefit less than smaller independents.
Helen Dickinson, CEO of the British Retail Consortium, told The Daily Telegraph that she welcomed the help for smaller businesses, but said the cap means it does nothing for larger retailers that provide the lion’s share of employment and investment in the sector.
Hopes that The Chancellor might have reintroduced instant VAT rebates for overseas shoppers in the Autumn Statement had been dashed before yesterday’s announcement, but there was a signal that the so-called Tourist Tax could be reviewed in the future.
The Treasury said: “The government will continue to accept representations and consider this new information carefully, alongside broader data.”
This is being seen by some retail analysts that a campaign to restore VAT-free shopping is making progress, although ministers maintain that restoring the rebates would cost around £2 billion.
Politically, it could also prove tough to sell a tax cut that might be seen to benefit wealthy foreigners at the time of squeezed household incomes.
Campaigners argue restoring VAT rebates would generate far more income and tax from rising sales than The Treasury believes.
The Centre for Economics and Business Research says that the Tourist Tax costs the UK around £10.7 billion in lost GDP.
Retailers in London are hardest hit by the lost of rebates.
The New West End Company, which represents retailers in central London, has reported that Chinese shoppers have returned to the capital in numbers last seen before the pandemic, but they are spending 60% less while here.
