What do the changes in business rates mean for you?
One aspect of the Spring Budget which was welcomed by small businesses and pubs alike was the announcement by the Chancellor Philip Hammond that they will receive additional help with their business rates bills. All pubs whose rateable value is under £100,000 will receive a discount on their bills to the value of £1,000, meaning that nine out of ten pubs in England will benefit from discounted rates. Small businesses which are losing their rate relief will have their increases capped to a monthly £50. The chancellor also announced the introduction of a fund worth £300 million to provide relief to the firms hit hardest on a discretionary basis.
However, despite this support, there are still calls from business groups for the business rates system to be overhauled. Business rates are calculated using the ‘rateable value’ of a property, which is determined by the rental value of a business’ space. With the update to business rates coming into effect from April this year, before the announcement made in the Budget, many businesses, particularly restaurants and pubs, expressed concern that the substantial rise in rates could mean them having to close down.
So, whilst the financial assistance has provided some relief for now, there are still concerns for the future. A statement from the British Chambers of Commerce stated that “Measures that mitigate the short-term impact of business rate rises are little more than a sticking plaster. The radical changes needed to improve the broken business rates system will have to wait for another day”.
Others in the industry, such as the Federation of Small Businesses, have expressed similar sentiments, describing the current business rates as out of date and in need of simplification to make it fairer. Suggestions as to how this could be achieved include moving more of the burden of business rates onto online companies such as Amazon, which continue to enjoy the benefits of existing as warehouses on relatively cheap land with lower rental value.