Some 510,000 businesses have seen an increase in their business rates from the start of April, compared to 420,000 paying the same and 920,000 seeing a decrease, following the first revaluation in rates since 2010. However, some companies will see their tax bill more than double and treasury income from business rates will rise from £28.8bn this year to £33.7bn in 2022.
The chancellor, Philip Hammond, has announced a £435m relief package including an increase cap of £50 per month (or £600 a year) for the approximately 25,000 firms that will lose small business relief as a result of the revaluation. Pubs with a rateable value of less than £100,000 will be eligible for a £1,000 discount, covering 90% of Britain’s pubs according to the chancellor. The biggest relief is a pledge of £300m over the next four years for local authorities to offer discretionary discounts to businesses in their area, although just £180m will be available this year. The government is also to soften proposals that would have made appealing against rates bills harder.
Businesses in London are set to be hit particularly hard with a £9bn increase in business rates over the next five years. Sir Peter Rogers, the chairman of New West End Company, which represents businesses in the West End, said “this will mean closures and job losses”.
Mike Coupe, the chief executive of Sainsbury’s, called for an overhaul, claiming “the UK needs wholesale reform of business taxation” to avoid penalising property-based companies. The chancellor acknowledged that the government must “find a better way of taxing the digital part of the economy”, with the revaluation leading to some Amazon warehouses having their rates bills cut.
If you believe your company to be exposed as a result of a business rates revaluation, a confidential discussion with an experienced and qualified specialist to talk through the range of options available may well be the best course of action. Please contact us for an initial consultation, free of charge.