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Autumn Statement brings business rates system review

It’s music to some small business owners’ ears: the business rates system is due for a major overhaul, according to Chancellor Osborne’s Autumn Statement.

The review is coming, and the Treasury plans to investigate the whole messy ball of wax according to one spokesman. This is the good news. However, the bad news is that the total amount collected from firms isn’t likely to change much at all – something that limited company contractors, sole traders and other self-employed Brits that work out of a shop are likely not to be terribly happy about.

These particular types of entrepreneurs have been fussing over the business rates system for some time, complaining about the costs smaller-scale firms and micro-businesses are subject to. The rates need to be overhauled, these campaigners have been saying, and considering the current system hasn’t been changed since its inception in 1988 it sounds like that it’s about bloody time for this new review.

There were some fine points in Mr Osborne’s words during the Autumn Statement, though. Firstly he said that any retailers who have less than £50,000 in property value would have their discount increased to £1,500 next year, up from a paltry £500. This should provide a boost to around half a million companies that have a shop, and will provide around £1 billion in business rates relief. With the business rates cap to remain frozen at two per cent as well, I suppose it’s better than nothing – and much better than bad news.

Of course this is just for England. In Northern Ireland and Scotland, business rates are a dealt with in a completely different manner. Not only that, but business rates administration has been devolved to Wales, with the Welsh government getting to name its own tune within its borders.

If you ask me, England needs a serious overhaul. It’s got the highest paid business rates in the entire European Union – and for some firms, these rates cost them ore than rent and wages. Plenty of people also say that declines in the High Street can be attributed to out-of-control business rates, and is likely why there’s so many vacant shops seemingly everywhere. For what it’s worth, I hope that this review changes things for the better and that some small-scale firms get some more relief.

 

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