Chancellor, George Osborne has confirmed that increases to business rates in England will be capped at two per cent, as opposed to being linked to inflation.
Mr Osborne revealed the capping of business rates in England as part of his Autumn Statement on Thursday morning, as he plans to encourage small businesses on to High Streets by slashing up to £1,000 from their rates bill.
The £1,000 discount will apply to retail premises, including public houses, cafes and restaurants, with a rateable value of up to £50,000 for two years. Businesses will also be allowed to pay their business rates in monthly instalments to ease demands on owners.
If your business has a rateable value of less than £12,000, you are eligible to apply for the Small Business Rate Relief Scheme. The Government had originally made plans to withdraw Small Business Rate Relief in April 2014, but thankfully, the scheme will be extended for another year which is fantastic news for an estimated 540,000 firms on the high street.
In addition, the Government will introduce a 50% business rates relief for 18 months for businesses that move into retail premises that have been empty for a year or more. Businesses which move into empty premises between 1st April 2014 and 31st March 2016 will be eligible for the relief.
Helen Dickinson, director general of the British Retail Consortium (BRC), said: "The BRC has campaigned for a 2% cap, and reform of the business rates system, and it is extremely welcome to hear it announced."
Meanwhile, Liz Peace, chief executive of the British Property Federation, was equally pleased to hear the Chancellor’s news, which could "mitigate the harm that continues to be caused by this archaic property tax".
It is felt the rates cap on its own will release an additional £90 million into the national economy next year and the Chancellor has promised to address the reformation of the business rate system in 2017; a move many business lobby groups had been calling for prior to the Autumn Statement.
The capping of business rate increases is restricted only to England. In Scotland and elsewhere in the UK, a different business rates system applies.
At present, Wales adopts identical rules to England for business rates but the Welsh government has yet to announce whether it will continue to do so in light of the Chancellor’s recent announcements. Earlier in 2013, local councils across Scotland were given the power to adjust their own business rates relief packages to reflect the needs of their local firms.
For a full report on the key announcements affecting small business owners and taxpayers from the Autumn Statement visit our Autumn Statement 2013 page.
Call us today on 0800 0523 555 or complete our enquiry form and we will identify your nearest TaxAssist Accountant in order to book a FREE initial consultation