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Autumn Budget 2017: Businesses given a £2.3bn business rates reprieve

  1. business rates
    Francois Badenhorst

    Francois Badenhorst Business Editor, UKBF & AWEB Staff Member

    Posts: 91 Likes: 18
    3 |

    This week’s Budget speech offered a welcome relief to British businesses struggling to absorb this April’s business rates revaluation.

    In his speech, the Chancellor yielded to calls from business lobbies to hasten the planned switch from using RPI  to CPI. The switch will come into effect in April next year, two years earlier than previously planned.

    From April, rates will rise in line with the lower Consumer Prices Index (CPI) measure of inflation, not the higher, more old-fashioned Retail Prices Index (RPI).

    Business rates were set to rise next year in line with September's RPI of 3.9%. The CPI from the same month stood at 3%.The change represents a £2.3bn reprieve for the UK’s rate-paying businesses.

    The £1,000 business rates discount to pubs with a rateable value of less than £100,000 has been extended until March 2019.

    The immediate relief of the swap to CPI will be complemented by another longer-term change to business rates. “I can announce today that after the next revaluation, future revaluations will take place every three years,” the Chancellor said.

    Ostensibly, the shorter period will reduce the size of valuation changes, making them easier to manage. The FSB’s national chairman Mike Cherry welcomed the switch, but warned: “the delivery of this pledge must be carefully thought-through”.

    “It can’t be allowed to inadvertently place additional burdens on small firms or require them to hire a surveyor just to get their bill right.”

    Staircase tax: a step too far

    That wasn’t the only change announced around how the Valuation Office Agency goes about its business: the Chancellor has put a stop to the so-called ‘staircase tax’. The staircase tax stems from a 2015 Supreme Court ruling relating to how you define a single business space.

    Subsequently, the VOA started allocating different bills for individual floors and workspaces linked by public areas, ie stairs. It meant substantial bill increases for companies that occupy separate floors of a single building.

    “We will change the law to ensure that where a business has been impacted by the Supreme Court ruling it can have its original bill reinstated if it chooses, and backdated,” Hammond said.

    Commenting on the staircase tax relief, the FSB’s Mike Cherry said: “ The Chancellor has done the right thing by reinstating original business rates bills. We hope the end of the staircase tax marks the first step towards wholesale reform of the regressive business rates system.”

    This article was originally posted on our sister site, AccountingWEB.

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  2. BristolBiz

    BristolBiz UKBF Regular Free Member

    Posts: 129 Likes: 38
    So, still no acknowledgement that the internet has affected retail. Empty shops everywhere, but no one's twigged why!
     
    Posted: Nov 23, 2017 By: BristolBiz Member since: Nov 5, 2008
    #2
  3. Mr D

    Mr D UKBF Big Shot Free Member

    Posts: 3,675 Likes: 333
    Is that the internet? Or that buyers shopping habits are not the same as 25 years ago?
     
    Posted: Nov 23, 2017 By: Mr D Member since: Feb 12, 2017
    #3
  4. BristolBiz

    BristolBiz UKBF Regular Free Member

    Posts: 129 Likes: 38
    Both probably, I've no problem with the evolution, but seeing high street business rates increase when there's so much pressure on profitability is counter-intuitive.
     
    Posted: Nov 24, 2017 By: BristolBiz Member since: Nov 5, 2008
    #4