Budget 2021: What does it mean for optometry?

Practice owners from across the UK have shared their thoughts after a 50% discount in business rates was announced in the Autumn Budget.

The one-year relief on business rates for retail, hospitality and leisure, up to the value of £110,00, was announced by Chancellor Rishi Sunak during Wednesday’s Budget announcement.

The planned increase in next year’s multiplier will also be cancelled. 

Business will also be encouraged to invest in green improvements, such as solar panels and heat pumps, via a ‘green investment’ fund.

The Chancellor believes that the measures “will collectively reduce the burden of business rates in England by over £7 billion over the next five years.”

The Federation of Small Businesses said that it was “pleased” the Government had taken up its calls to provide relief for businesses investing in green technology, but cautioned that “much more will be needed to support small employers in the months ahead.”

FSB national chair, Mike Cherry, said: “This Budget has delivered some measures that should help to arrest the current decline in small business confidence.

“But, against a backdrop of spiralling costs, supply chain disruption and labour shortages, is there enough here to deliver the Government’s vision for a low-tax, high-productivity economy? Unfortunately not. Where inflation and forthcoming tax hikes are concerned, the clouds are gathering.

“It’s good to see the chancellor embrace our recommendation for business rates reform: changing the system so it stops hitting small firms that invest to make their premises more sustainable with higher bills.”

He added: “Wider rates reform is positive, especially the promise of a substantial discount on bills for the hard-hit retail, leisure and hospitality industries, alongside cancellation of an increase in the rates multiplier.”

Industry reaction

“We need a little more than a promise”

Peter Frampton, optometrist and practice owner in Northumberland, said: “A business rate reduction is obviously welcome. I hope it encourages High Street businesses, although I feel it needs more to change the fundamental shift in shopping habits.”

He added: “Speaking as an environmental scientist, and with COP26 this weekend, we need a little more than a promise not to increase business rates for a year if we invest, rather heavily but necessarily, in green technologies.”

“I'm glad I changed my status to retail”

Claire Ranger, managing director and CEO at Hammond & Dummer Bespoke Opticians in Milton Keynes, said: “I'm glad to receive the business rates relief. I'm also glad that I contacted the council and changed my status to retail a couple of years ago, as this qualifies me for it.

“I do think that companies who sell directly from warehouses should pay the same amount, though. High Street retailers are disadvantaged compared to internet retailers, whose rates are much less, meaning and therefore their outgoings are less than ours.”

“The devil will be in the detail”

Head of facilities at Hakim Group, Muzza Yunus, said: “There is still a degree of trading unpredictability on the High Street as we head into 2022, so the chancellor's support on business rates is welcome. However, as always, the devil will be in the detail.

“I appreciate that timing might not be ideal for a total reform of business rates as the chancellor looks to balance tax reform with COVID-19 related spending but, in time, this tax on businesses will need to be addressed to ensure that the High Street isn't disadvantaged and can be more competitive when compared to online businesses.”

The Scottish perspective 

In Scotland, business rates are set by the Scottish government – however, the overall budget that Westminster sets for the devolved nation (£4.6 billion in this year's budget) may have some impact on the choices made by Holyrood. OT asked two Scottish practice owners for their thoughts.

“A reduction in rates enables further investment in businesses and in our people”

Peter Telfer, managing director at Urquhart Opticians, said: “In Scotland, business rates is a devolved power and during the pandemic the majority of sectors have been supported with 100% relief for non-domestic rates. However, this support ends in April next year. I would like to see this commitment by the chancellor, at the minimum matched by the cabinet secretary for finance and the economy, Kate Forbes, in Scotland.

“Business rates require a radical overhaul, and it remains a tax on the High Street. The High Street and local businesses need a further opportunity to recover from the pandemic and we have yet to truly understand the wider economic impacts.

“With inflation and rising costs, physical businesses need to continue to be supported financially and not penalised. A reduction in rates enables further investment in businesses and in our people. In Scotland, a return to full business rates could make many sectors unviable. In optometry, it would certainly make life much harder at a point when we are just recovering.”

“We all have to adapt”

Pam Robertson, owner of Angus Optix, in Forfar, said: “Overall as a small business owner, the small business rates relief saves me a few thousand per year. It means this could be the 'last little bit' that goes into reinvestment for our practice or the next shop fit. Without it, I would need to find it elsewhere - which means putting my prices up or cutting costs elsewhere.

“Regardless of whatever the chancellor has in store for us over the next few years, I think the post COVID-19 landscape will be very different from the pre COVID-19 one, and we all have to adapt to this for the survive or thrive approach. It’s all part of the balancing act of being a small business owner.”