- 630,000 small businesses will pay no business rates from April 2017.
- No business rates for businesses with property Rateable Value of up to £15,000, increased from £6,000. The higher rate threshold will rise from £18,000 to £51,000.
- Business Rates to now be measured on Consumer Price Index, rather than Retail Price Index.
George Osborne has today announced the government’s plans to help the UK’s small businesses; from April 2017 businesses whose properties have a Rateable Value of up to £15,000 will not have to pay business rates at all, a rise from £6,000 previously. Mr Osborne said the “typical corner shop in Barnstaple will pay no business rates at all”.
For businesses that have properties with a Rateable Value of more than £15,000 from 1 April 2016, the ‘uniform business rate’ will hit a landmark 49.7 pence in the pound – this will be its highest level since its introduction in 1990.
In a new survey commissioned by CVS surveyors, which spoke to 250 UK business owners, reveals over a quarter (26%) of business owners reported that the cost of running their business is making them consider other forms of employment, or are having to make staff redundant. A further one in five said that their business rates represent one of their biggest business costs.
Further analysis shows there is little faith in the Government to work in their interest. Almost all of business owners (92%) think that the Government won’t demonstrate its pro-business credentials by easing the burden of business rates and the same number believe that the Government won’t utilise the long awaited business rates strategic review as a way to make business rates easier to understand.
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Mark Rigby, Chief Executive at CVS Business Rent and Rates specialists, said:
“After years of pressure from businesses from small shops to steel plants, the Chancellor has finally listened to ratepayers and abolished the link between business rates and RPI, an outdated, ineffective measure of inflation. At the same time, he has removed the cloud of uncertainty hanging over small businesses each year as they wait to see if vital reliefs will be renewed.
“Had it been introduced today, the switch from RPI to CPI would have saved businesses £211 million in 2016/17 alone. When it is introduced in 2020/21, firms are set to save around £370 million as well as benefitting from rates which are more closely in line with the ‘real economy’.
“The Chancellor’s decision to introduce more frequent revaluations, at least every three years, will generate a mixed response and as ever the devil is in the detail. On one hand, businesses will have rates which are more in line with market forces, however on the other hand, there will be less certainty of cost for businesses planning ahead.
“At first glance, these reforms represent positive steps, but there’s still more work to do to fix our ‘broken’ business rates system. This tax remains one of the top three overheads for many firms and yet the business rates system is still opaque and inaccessible. The Chancellor now needs to focus on introducing more transparency, making better use of digital technology and properly resourcing the VOA to support ratepayers nationwide.”
For more information on how to challenge your business rates go to www.cvsuk.com