You are here: Home - News -

Spring Budget ’17: £435m business rate relief revealed

by:
  • 08/03/2017
  • 0
Spring Budget ’17: £435m business rate relief revealed
A £435m package of measures to ease the burden of increasing business rates on smaller firms has been unveiled as part of the Spring Budget.

Business rates will increase by almost £5bn by 2021-22, with the tax expected to contribute £33.7bn in revenues in 2021-22, up from £28.8bn in 2016-17.

Reaction to the move has been mixed with some praise, but others noting that rather than adding clarity to the situation, chancellor Philip Hammond only muddied the waters by confirming a future consultation on the revaluation process.

The chancellor also announced in his Budget that businesses with turnover below the VAT registration threshold of £83,000 will not have to begin filing quarterly returns until April 2019. They had previously been due to start filing quarterly returns from next year as part of the government’s Making Tax Digital programme.

The three measures the chancellor announced to assist smaller businesses were:

  • any firm coming out of Small Business Rate Relief will receive an additional cap next year on increases of no more than £50 a month. Subsequent increases will be capped at either the transitional relief cap or £50 a month, whichever is higher;
  • local authorities will be given a £300m fund to deliver discretionary relief to target individual hard cases in their local areas;
  • pubs with a rateable value of less than £100,000 will receive a £1,000 discount on business rate bills in 2017.

Speaking when delivering the Budget, Hammond said: “Taken together, this is a further £435m cut in business rates, targeted at those small businesses facing the biggest increases, protecting our pubs, and giving local authorities the resource to respond flexibly to local circumstances.”

 

Pragmatic thinking

TFC Homeloans head of marketing Charlotte Rutter, welcomed the move for its short-term benefit.

“By softening the blow for small businesses which would have been battered by the revaluation of business rates this year, Hammond has saved many from going under,” she said.

“That would have been no good for the economy so this pragmatic thinking and the £50 a month cap should be welcomed.

“It will be interesting to see which local authorities will benefit most from the discretionary relief fund, but the bigger picture is that this is a sensible move to keep Britain’s nation of shopkeepers in business,” she added.

 

Adding anxiety

In contrast, Creditplus managing director Shaun Armstrong was disappointed that clarity on business rate hikes desired by many SME business owners was not forthcoming.

“Instead the chancellor has created more anxiety by announcing there will be a consultation but not revealing much else,” he said.

“He has hung out to dry a large section of the SME community. If you’re a prosperous business, providing jobs in the community, then the government doesn’t want to know.

“This seems counterintuitive. What kind of message does it send out to business owners? The government is giving local councils discretionary relief funds for hard hit cases but it is not interested in supporting growing, successful businesses,” he added.

Elsewhere in the Budget, rising National Insurance Contributions (NICs) for the self-employed and a cut in the tax-free dividend allowance for company shareholders from £5,000 to £2,000 were announced.

And legislation will be amended to ensure that offshore property developers who are developing land in the UK, including on pre-existing contracts, will have to pay tax on their profits.

Related Posts

There are 0 Comment(s)

You may also be interested in