Head of Specialist Business Rates comments on Business Rates and Consumer Markets Leader of Industry and Head of Retail comment on the Budget impact on retail and consumer businesses 

Phil Vernon, Head of Specialist Business Rates Projects at PwC UK, said:     

"Raising the small business rates relief thresholds to £18,000 and £21,000 is a welcome boost for the high street. It will take around 70,000 more shops, cafés and pubs out of business rates entirely, and a two-year real-terms freeze gives the rest some certainty. But small business rates relief is generally limited to businesses with a single property, so a local baker or café owner with a second shop will often get none of it, though they will still benefit from the freeze. That also sharpens the cliff edge: opening a second site could now cost a growing business more in lost relief than ever before.  

"Support for the high street costs around £1.1bn over the next two years, and part of the bill falls on other ratepayers. Extending the 1p Transitional Relief Supplement for another two years means businesses whose bills rose only modestly or fell at the revaluation will help pay for the freeze. Removing reliefs from vape shops and adult gaming centres, and introducing a General Anti-Avoidance Rule, are further steps introduced to make sure support reaches the businesses it is meant for and that everyone pays what they owe. 

"Handing mayors a 20% share of business rates from April 2027, with local and regional government keeping all of it by the end of the decade, gives local areas a real stake in growth. But the more of the tax that is kept locally, the more reliefs and successful appeals will hit local budgets directly. Areas that rely on a handful of very large ratepayers will be most exposed, so councils may need protection against sudden losses."  

Commenting on the impact of the Chancellor’s Budget on retail and consumer businesses, Sam Waller, Consumer Markets Leader of Industry at PwC UK, said:  

"With the Prime Minister putting the revival of Britain's high streets front and centre of his premiership, the retail, hospitality and leisure sectors had a lot riding on the new Chancellor's first Budget. As we predicted before the Budget, there was no movement on some of the high street's biggest asks around lower VAT for hospitality, the restoration of tourist tax refunds, or an easing of the payroll pressures introduced in the last Budget.   

"However, there was some of the promised "breathing space" for the smaller businesses that are the lifeblood of our high streets. In particular, an additional 11,000 small pubs, restaurants, cafes and other high street businesses will be lifted out of businesses rates altogether, while business rates for all high street operators will rise by no more than inflation.  

"Beyond an expected 3.9% rise in the National Living Wage, there were no other hikes in the cost-of-doing business for the majority of Consumer Markets operators.  

"Cost-of-living help for consumers, for example through the £100 Household Energy Payment and frozen fuel duties will support consumer confidence and encourage shoppers to spend. Most of all, the earlier timing of this year's Budget will mean less of the disruption and uncertainty that held back shoppers in the run up to last Christmas.  

"However, with the price of essentials like food and energy expected to rise faster in the new year, consumers' relief may be short-lived. And, for specific Consumer Markets sub-sectors including hotels and gaming, the new Overnight Visitor Levy and higher Machine Games Duty, while lower than feared, risk denting demand or squeezing margins further.  

"Overall, there will be relief for most Consumer Markets businesses that there has been little change to their operating environment as a result of this Budget. But with the OBR forecasting a decline in real household disposable income for the next two years, businesses are not out of the woods yet."  

Jacqueline Windsor, Head of Retail at PwC UK, said:    

"This was a Budget of small measures designed not to rock the boat, but to instill confidence, particularly amongst the smaller businesses that are the backbone of our high streets.  

"While retail did not receive all the good news it hoped for, there was still substantial action to support our high streets, ranging from approving infrastructure capital spending which will benefit town centres up and down the country to eliminating or capping business rates increases for retail and hospitality operators.  

"In lieu of a wider online sales tax, the enforcement of VAT compliance on online marketplace sellers will go some way to protecting high street retailers from unfair competition.   

"Extended tariff reductions to a basket of food and drink imports will be welcomed by shoppers and retailers alike, as will more generous reliefs for small alcohol producers and lower alcohol drinks.  

“Overall, this was a 'small beer Budget' that supported small traders, including small beer manufacturers. While businesses will still need to contend with higher energy and National Living Wage costs, the government has done its best to both limit any additional costs-of-doing-business, while adding protections for the smallest businesses and next generation of entrepreneurs who will be pivotal to driving future growth for our high streets."

Our full budget reaction