Whilst the Chancellor, Philip Hammond tried to make light of the Spring Budget with countless jokes and jibes at the opposition, his announcement concerning business rates is no laughing matter.
In February it was announced that business rates would be revised in order to offer lower bills to businesses across the country, that accurately reflect changes in their local property market.
Coming into force in England on 1 April, nearly three-quarters of businesses will see no change or a fall in their bills.
Philip Hammond announced during the presentation of the Spring Budget that in addition to the £3.6 billion transitional relief which was announced in November 2016, the Government will provide £435 million of further support for businesses facing significant increases in bills.
As part of the £6.7 billion package of business rates cuts over the next 5 years, 600,000 businesses across the country with a rateable value of £12,000 and below will receive 100% relief and will pay no business rates at all. Eligible properties with a rateable value between £12,000 and £15,000 will also benefit from business rates relief, offering significant reductions on their business rates bills.
Small Business Rate Relief will be permanently doubled however support will be available for smaller businesses that will no longer receive relief and local authorities will receive around £300 million over the next three years to provide discretionary support to individual hard cases in their local area.
In addition, from April 2020 business rates will switch from being linked to the Retail Price Index (RPI) to the Consumer Price Index (CPI), saving businesses around £370 million in total from 2020-21.
According to the latest figures released by the Department for Communities and Local Government, bills across northern regions are due to fall by 10% before inflation and transitional relief – a fall of £600 million a year – while businesses in the Midlands Engine will see their bills fall by an average 5% – a fall of £230 million a year.
Communities Secretary Sajid Javid said:
"Our regions have huge economic potential, and can be a catalyst to driving economic growth across the country.
"The revaluation of business rates will help make sure bills are accurate, with nearly three-quarters of businesses seeing a fall, or no change. In fact, the generous reliefs we are introducing mean that 600,000 small businesses are paying no rates at all – something we’re making permanent so they never pay these bills again."
Commenting, Mark Hayward CEO NAEA Propertymark said:
“The support announced by the Chancellor for small businesses to help them cope with the business rate changes will help some, including the discretionary fund and cap on how much they will lose, but this doesn’t tackle issues such as the revaluation for small businesses in areas of high property prices.
“The launch of the Government’s Midland Energy Strategy is also welcome as we know investment in infrastructure and transport are the things that can get the economy moving. New homes are vital for affordability but employment rates, income levels and consumer confidence also contribute to housing market activity and pricing.”