The March 2016 budget revealed that hundreds of thousands of small businesses will fall below the new lower limit for rates (no rates at all up to £12,000). The announcement will take 600,000 premises out of paying rates and benefit a further 250,000 above the threshold. This will help both the 64% of shops in England and Wales that have RVs up to £12,000 and those around the average RV of a shop, which is just over £27,000.
BIRA (British Independent Retailers’ Association) welcomed the move as Alan Hawkins, bira CEO, commented: “The government has listened to businesses and in particular to the High Street shops whose business rates pain first alerted everyone to the damaging effects of this outdated tax. These changes go a long way to alleviating that pain in the longer term and bira welcomes that.”
The only negative note is that the new thresholds will apply only from April 2017 and in the meantime all shops with RVs below £50,000 will effectively be worst off than 2015 as the Chancellor has not reversed his removal of the £1,500 discount.
Corporation tax for smaller businesses will reduce to 17% but again with a time delay (by 2020) and tax-free allowances offered for online start-ups.