The Chancellor of the Exchequer, George Osborne gave his budget to Parliament today. Here are the headlines for business rates:
Key Facts from the Budget 2016
◦From April 2017 for properties below a rateable value of £12,000 qualifying businesses will pay nothing; between £12,000 and £15,000 there will be taper relief; and between £18,000 and £51,000 there will be a marginally lower rate poundage charged. ◾It is claimed by the government that 600,000 small businesses will pay no business rates.
◾The government will transform business rates billing and collection. By 2022, local authority business rate systems will be linked to HMRC digital tax accounts so that businesses can manage their rates bills in one place alongside other taxes. As a first step, the government will work with local authorities across England to standardise business rate bills and ensure ratepayers have the option to receive and pay bills online by April 2017.
◾ The government will aim to introduce more frequent business rate revaluations (at least every 3 years) and will publish a discussion paper in March 2016 outlining options on how to achieve this to support both businesses and the stability of local authority funding.
The rate poundage will be linked to CPI rather than RPI from 2020.
◾Rates retention will move towards 100% for Greater London from April 2017
Robert Brown BSc FRICS FIRRV, partner in our business rates department and current president of The Rating Surveyors Association commented:
“Rates bills for 2016-17 have already been issued so there are no immediate cuts in business rates.
A welcome and slightly better than expected announcement from the chancellor with regard to the small business rate threshold increasing from £6,000 to £15,000 – meaning that many more qualifying businesses will pay no rates whatsoever from 2017.
The Chancellor said that the higher rate threshold will increase from £18,000 to £51,000 and this will have a benefit for slightly larger business properties. Needless to say the devil will be in the detail as there are qualifying requirements and the focus may well move now to question exactly what is a small business – as rateable value of a property is a measure of rent paid rather than turnover. There is also a potential issue when comparing a business with multiple small properties with a business with a single property.
The claim is that from next April 2017 some 600,000 small businesses will pay no business rates at all , a further quarter of a million will see their rates cut, and half of all properties will see their rates either fall or be abolished altogether. Interesting as to whether the chancellor is predicting the outcome of the Rating Revaluation?
Rate retention to be 100% for Greater London from 2017 but why not every local authority?”