The Chancellor’s speech contained impressive headlines but as always the devil is in the detail.
The changes to business rates are, arguably, far less favourable than the headlines might otherwise suggest.
- Small Business Rate Relief: Effective from the 1st April 2017 a property with a rateable value of £12,000 and below will receive 100% relief and will not be liable to pay business rates. Properties with a rateable value between £12,000 and £15,000 will receive tapered relief between 100% and 50% relief.
- Lower Rate Multiplier: Properties with a rateable value below £51,000 will pay business rates based on a lower multiplier. The precise business rate will not be known until early 2017, but the current differential between the lower rate multiplier and higher rate multiplier equates to approximately 2.7%.
- From April 2020, the annual increases to business rates will be increased by indexation in line with the Consumer Price Index. Up until April 2020, annual increases will continue to be subject to a cap based on the Retail Price Index.
- Proposal to carry out a Rates Revaluation at least every three years. Revaluations are currently five yearly.
- Devolution: Local authorities to be given powers to cut business rates to boost growth, or to levy a premium for local infrastructure projects.
The clear ‘winners’ are small businesses. If your rateable value is greater than £51,000, then any ‘benefits’ of the budget announcements will not filter through until April 2020.
More frequent revaluations should mean more accurate Rateable Values. However, appeal procedures are currently under the spotlight with possible changes suggested which could include a fee to appeal and costs being payable should an appeal be unsuccessful.