Analysis by tax firm Ryan, reported by the Telegraph, claimed that Harrods’ flagship store in Knightsbridge was expecting to see its business rates bill fall by £1.1m to £8.7m, while Selfridges Oxford Street outlet was down by £622,000.
The move has prompted allegations that the Chancellor Rachel Reeves is funding tax cuts for the luxury retailers by hiking rates for pubs and bars.
While Harrods and Selfridges will be seeing huge cuts, pubs will be seeing on average a £1,400 rise in their bills in the first year of the new valuations, with that expected to rise further over the following two years.
Broken promises
The move flies in the face of the Labour manifesto pledge to “level the playing field” on rates by “replacing” the system.
Instead the Chancellor offered a 5p reduction to the multiplier, claiming to deliver lower tax for pubs, fully in the knowledge that the VOA was about to hand out revaluations which would see hospitality operators facing soaring rates charges.
Responding to the Telegraph, UKHospitality chair Kate Nicholls said: “It’s outrageous that two luxury retail stores are receiving cuts to their business rates running into the millions of pounds, while hard-pressed local pubs, neighbourhood restaurants and coastal hotels are seeing their bills significantly increase.
“This is a damning example of how the business rates system has not been reformed in a way that delivers the government’s intention to level the playing field to benefit hospitality businesses.
“The eye-watering increases to business rates that many hospitality businesses are seeing risk further closures and job losses and need to be urgently addressed.”