In his Autumn Statement yesterday, the Chancellor of the Exchequer announced the implementation of some Business Rate reforms in England which will apply to all companies and individuals who rent or own commercial premises and are subject to business rates. Reforms are welcome news on this unpopular and awkward tax, although they did not end in the result that most paying entities would have liked (such as abolishment perhaps?).
Here is a summary of the changes:
- The annual uprating of business rates will change to the Consumer Price Index (from the Retail Prices Index which is currently the case), with effect from 1 April 2020.
- Small Business Rate Relief (‘SBRR’) will be permanently doubled from 1 April next year, with a rise in the SBRR threshold to rateable values of up to £12,000, tapering to £15,000.
- There will be a rise in the threshold for business rates. Calculations using the standard multiplier will apply to properties with rateable values of £51,000 or above (previously £18,000). The new threshold will take effect on 1 April 2017.
- A new business rates discount has been introduced specifically for local newspapers. Subject to certain restrictions, local papers will be able to claim a £1,500 discount on their office space for a two year period beginning on 1 April 2017.
- The government has pledged to work with local authorities in order to not only standardise business rates but also bring rates accounts online.
Further to the above, revaluations of business rates on properties in England will be introduced at least every three years. A discussion paper is due to be published shortly outlining how this will be achieved.
Pilots will be launched by the government to achieve 100% retention of business rates revenues for local authorities. The pilot areas are Greater London, Greater Manchester and the City of Liverpool. Mr Hammond announced that small businesses in rural areas will be given 100% tax relief worth up to £2,900 per year by increasing the Rural Rate Relief. All other companies will benefit from a further £6.7bn business rates relief over the next five years, but further details haven’t been released yet.
The general reaction to the Autumn Statement has been unenthusiastic, hardly surprising from an audience mostly made up of people who argue strongly for this antiquated and awkward system to be abolished completely. The CBI commented that it provided “limited moves to address the growing burden of business rates”, and the director of business rates at one major surveying practice damned it with faint praise by stating quite eloquently “the chancellor presented this bad news very well”. Nicely put.
For further information or to discuss how this might affect your business call Michael Boardman on 020 7118 3456 or 07793 980489.