Osborne pulls ‘rabbit from hat’ in 2016 Budget to take 600,000 small businesses out of rates and renew measures to tackle illicit trade, but brings in soft drink levy.
George Osborne has given embattled small businesses around 6,000 reasons to cheer thanks to his plans, unveiled in the 2016 Budget, to pull them out of business rates.
“At present, small business rate relief only applies to businesses with a rateable value of less than £6,000,” he said.
“Today, I’m more than doubling it – permanently. The maximum threshold will rise to £15,000. I’m also going to raise the threshold for the higher rate from £15,000 to £81,000. That means that from April next year, 600,000 small businesses will pay no business rates at all.”
That means that from April next year, 600,000 small businesses will pay no business rates at all
This amounts to a permanent saving for more than half a million small businesses of almost £6,000 per year.
Osborne also said that he is supporting small business further by introducing measures that will “radically simplify” the administration of rates, as part of what he called “a budget for small business”.
“This measure will also significantly reduce the burden on the Valuation Office Agency, as more stores are taken out of paying rates altogether,” he said. However, he also urged the chancellor to cap rates increases in line with the Government’s 2% inflation target.Initial reaction from the industry was positive, with James Lowman, chief executive of the ACS calling the move a “welcome measure”.
Mike Cherry, policy director at the Federation of Small Businesses, said: “The combined measures announced on business rates – the single biggest tax cut in today’s Budget – will be viewed by our members as a welcome and important step on the road to fundamental reform.”
Business rates expert Paul Turner-Mitchell added: “All small properties, such as small shops, will have to pay no business rates at all if the value of the property is worth less than £12,000 and is a permanent fixture, removing much uncertainty.”
- Fuel duty: FROZEN
- Tobacco duty: Excise duties on tobacco to
rise 2% above inflation; RYO to rise 5%
- Illicit trade: Measures to tackle it renewed with £31m investment in enforcement officers
- Beer and cider duty: FROZEN
- Whisky and other spirits duty: FROZEN
- Sugar levy: TO BE INTRODUCED IN TWO YEARS
- Wine duty: To increase by 1.3%