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Business Rates Budget Highlights 2017

Marketing / 8 Mar, 17

The Chancellor of the Exchequer, Philip Hammond gave his first budget to Parliament last week. The Chancellor acknowledged the concerns surrounding business rates but declared that they could not be abolished as he announced changes that will equal a further £435million cut in business rates.

Key business rates highlights

•Business rates will not be abolished but the Chancellor suggested that there would be another consultation on business rates, to find a way of suitably taxing the digital economy.

•A cap will be put in place for businesses moving from the small business rates relief that will ensure that their monthly business rates bill does not increase by more than £50 per month.

•All pubs with a rateable value less than £100,000 will get a £1,000 discount on their business rates bill.

•Local authorities will be provided with a £300 million discretionary relief fund to treat business rates issues in their locality.

•These changes will account for a £435million cut in business rates.

Our Opinion

Robert Brown, business rates expert in our rating team commented on the budget, and its impact on business rates across England and Wales:

“Having only just held several consultations on the business rates revaluation process I wonder whether a further consultation is really necessary. While I believe there is an unfair commercial advantage to be gained by digital businesses who may not be as seriously affected by increased business rates bills, there is currently not an easy solution on the table to effectively rate online sales. I have previously suggested that an online tax levied at point of sale similar to a delivery charge might provide a one-off solution.

“The announcement of the discount for pubs is great news with 90% of pubs due to benefit from the discount. Based on the brief statement today in the House of Commons one has to wonder however “when is a pub a pub and when is it a restaurant or a night club?” thus, as always the devil will be in the detail!

There was also welcome news for smaller businesses with a cap put in place to restrict their bills increasing by a disproportionate amount if they move outside the small business relief parameters. I hope this is something that the government commit to in the long term.

“Once the £300million allocated to treating hardship cases is spread between several hundred local authorities it will quickly disappear and it will be interesting in exactly how he plans to spread the money between constituencies.

“The take home message from the Chancellors budget was that these changes would result in a £435 million cut in business rates. It is definitely a step in the right direction but in relation to the £25billion collected by business rates it is merely a drop in the ocean.”

View our guide to reducing your business rates here.

Topics: News

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