The Treasury last week (November 13) announced that draft legislation had been introduced “for the first time” to “permanently cut business rates” from 2026.
Labour MP for Bristol North West and chief secretary to the Treasury Darren Jones yesterday (November 18) said the cuts would “[create] a fairer business rates system” to “protect” pharmacies.
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“We intend to introduce permanently lower tax rates for retail…including pharmacies from 2026/27,” he said in a written response to a parliamentary question.
“This permanent tax cut will ensure that they benefit from much-needed certainty and support,” he added.
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Jones said that the system will “[support] investment” and will be “fit for the 21st century”.
And the government “recognises that businesses will need support in 2025/26,” he added, stressing that it has “prevented the current retail, hospitality and leisure (RHL) relief from ending in April 2025”.
The relief will be extended for one year “at 40% up to a cash cap of £110,00 per business” and the small business multiplier has also been frozen, Jones said.
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The Labour Party previously pledged that it would “replace the business rates system” to “level the playing field between the high street and online giants” before the general election in July, but further details of the proposal were unclear at the time.
There have been ongoing calls for the government to change the business rates system, with MPs and pharmacy sector leaders calling for the system to be reformed in 2019.
After business rates for small companies were abolished for a year in 2020, a 66% discount on business rate bills was introduced in July 2021 - but the arrangement came to an end in March 2022, leading pharmacy bodies to demand further business rates relief.
“Cock-up”
It comes as Conservative MP for Broadland and Fakenham and shadow business minister Jerome Mayhew slammed the government’s recently announced budget tax hikes.
“Increased taxes for hospices, care homes, GPs and pharmacies – is that a deliberate decision by the Labour government or just a cock-up,” Mayhew asked during a House of Commons debate last week (November 14).
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During the debate, Conservative MP for Harrow East Bob Blackman called for the government to “safeguard” private contractors’ positions by protecting them from the increase in employer National Insurance Contributions (NICs).
“Otherwise care homes [and] pharmacies will close down,” he stressed.
“Political knockabout”
Meanwhile, Conservative MP for West Suffolk Nick Timothy accused health minister Karin Smyth of not taking the situation seriously enough after she blamed the previous government for the current state of the NHS.
“I do not think the minister understands that she is not engaged in some party-political knockabout,” Timothy said.
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He made the comment after Smyth said that the current “precarious situation” can be blamed on “the failures of the past 14 years and the £22 billion black hole that the government inherited”.
Timothy stressed that “pharmacies are watching this debate and looking to the minister for answers”.
Earlier this month, MPs urged the government to “go back to the drawing board” and “invest” in community pharmacies amid growing concerns about the upcoming hike in employer NICs.