Marijana No Comments

Chancellor to cut business rates by 33% for half a million SMEs

Philip Hammond will use Monday’s Budget to cut business rates by a third for half a million SMEs.

The Chancellor is expected to say in the Budget that he has listened to pleas from the nation’s embattled high street by unveiling £900m in immediate business rates relief for 496,000 small retailers.

Retailers have long campaigned for reform of business rates, which are calculated based on the annual market rent value of a commercial property, and disproportionately affect bricks-and-mortar high street retailers as opposed to digital retailers located in out-of-town industrial parks.

A long-delayed revaluation of properties last year pushed up business rates across the country. Accountants EY calculate that business rates have risen by 15 per cent in the last seven years.

This has added to rising costs for SMEs already battered by what Federation of Small Business chairman Mike Cherry has called “a perfect storm” alongside rises in the National Living Wage and the imposition of the Apprenticeship Levy.

However, the Treasury has resisted wholesale change of the system, which raises around £30bn a year for the Exchequer. It has instead focused on providing business rates relief to smaller businesses, which it estimates has saved companies £10bn since 2016.

The £900m relief will apply to small retailers on premises with a rateable value of £51,000 or below. The fund will only apply to England, as the devolved authorities have responsibility for setting their own business rates. It remains unclear how long the relief will apply, but it is understood that 90 per cent of small English retailers will be eligible.

The FSB called the measures an “early Budget treat” for its members, though it said business rates relief should extend beyond retail to the hospitality and service sectors.

FSB national chairman Mike Cherry said: “In the lead up to the Budget, we’ve been urging the government to provide targeted support to struggling small firms on our high streets. This announcement shows the Chancellor has listened and this relief is a welcome step in getting the urgent help that all small businesses need. This fund will help keep high streets at the heart of our communities.

“Small firms are the lifeblood of our high street. They are under a huge amount of pressure, with current business rates bills adding to that ever-increasing strain. For far too long they have come up against an outdated and unfair rates system and it’s clear that change is needed.”

Source: SME Web

Marijana No Comments

London’s small firms hit with £8.2bn business rates bill

The business rates bill hitting London firms will rise to £8.2bn today, raising the prospect that firms could move out of central parts of the capital due to high property costs.

Both the national living wage and business rates increase across the UK today, and, according to the Federation of Small Businesses (FSB), London now pays 33.1 per cent of the country’s total business rates bill.

Meanwhile, the national living wage will rise by 4.4 per cent today, from £7.50 per hour to £7.83 per hour.

High property costs are threatening to push some businesses out of the centre of London. A recent survey from the FSB found that 60 per cent of Zone 1 firms fear they will not be able to afford their current premises in five years.

Sue Terpilowski, London policy chair at the FSB, said there should be a major review of the business rates system.

“Many small business in London will see their business rates increase upwards of 20 per cent on 1 April,” she said.

“The high cost of doing business is putting additional pressure on wages and inflation for London businesses. The cost of employing staff generally and the heavy burden of cripplingly high commercial space costs is having additional negative impacts on small businesses.”

Source: City A.M.

Marijana No Comments

New business rates changes to help Scots businesses to ‘thrive’

NEW business rates changes coming into force in April will help stimulate the economy and improve transparency, the Scottish Government has said.

From April 1, there will be no business rates for unoccupied new properties and tenants who take them on will be rates-free for the first year.

Where properties are improved, they will not pay any additional rates as a result of the improvement for 12 months.

Eligible childcare day nurseries will receive up to 100 per cent relief.

The changes were announced last September following the Barclay review of business rates.

Finance Secretary Derek Mackay marked the start of the new policies by visiting The Orchard Nursery in Edinburgh.

He said: “These changes – many of which are unique to Scotland – will help our businesses to continue to thrive while also ensuring they make an appropriate contribution to important local services. When I appointed Ken Barclay to review the rates system, I tasked him with updating it to better support business growth, encourage long-term investment and enable businesses to better navigate fast-changing marketplaces.

“The changes we put in place – in many ways going further than the Barclay recommendations – also allowed us to offer wider benefits, such as supporting the expansion in funded early learning and childcare entitlement with the relief for nurseries. I’ve been impressed with what I’ve seen at The Orchard Nursery and hearing how they intend to use the savings they will make next year.”

The Scottish Government said the relief for nurseries was designed to support nursery provision throughout Scotland by reducing overheads for nursery owners, saving the sector around £6 million next year.

Vicky Coia, owner of The Orchard Nursery, welcomed the changes.

She said: “We are pleased the Scottish Government has led the way by creating business rate relief for the nursery sector across Scotland. It will allow us to invest in more training, staffing and resources to enhance staff practice and the opportunities and experiences we offer the children and their families.”

Andy Willox, the Federation of Small Businesses (FSB) Scottish policy convenor, said: “These new measures from the Scottish Government take us a step closer to developing a fairer, smarter rates system. FSB made the case for these changes in our submission to the recent rates review, and we’re pleased to see ministers turn them into real help for local firms.

“Local nurseries are a prime example of smaller businesses that are fundamental to the success of their local community and economy. These new rates should ensure that they aren’t penalised because they operate from specialised premises.

“At FSB, we’re firmly of the belief that if a business makes an improvement to their property they should be given an opportunity to recoup their costs before facing a higher bill. The Scottish Government’s new business accelerator relief does exactly that.”

The Barclay review set out 30 recommendations for changes to the business rates system in Scotland.

Two of the report’s recommendations were rejected. Farms will not be placed on the Valuation Roll and they will continue to be exempt from rates. Large-scale food processing plants on agricultural land will also not become subject to business rates.

Source: The National