UK high street shops and pubs handed £500m business rates cut
Small firms will receive a one-third discount on their rates bills from 1 April for next two years.
Britain's army of small high street firms will be given rare
good news on Monday when they share tax cuts worth half a billion pounds as business rates bills
are slashed across England.
While council
tax, prescriptions, utility bills and car tax are all set to rise,
thousands of high street shops, pubs and restaurants will be set for a
reprieve.
In last year's Autumn Budget,
the government announced a business rates discount scheme for small-sized high
street properties in England which have a rateable value below £51,000.
Under the plan, small firms will receive a one-third discount on their rates bills from 1 April for the next two years, which Chancellor Philip Hammond said will help “up to 90 per cent of all independent shops, pubs, restaurants and cafes”.
According to numbers crunched
by real estate adviser Altus Group, the average shop will see savings of £3,292
in their business rates bills for 2019/20, while the average pub will save
£6,052.
The average restaurant will receive a discount of £7,212 as a result of the new retail discount with councils in England setting aside £502m this financial year to cover the cost.
Robert Hayton, head of UK business rates at Altus Group, said it was imperative that small firms check their new tax demands carefully, warning “some councils are insisting that firms apply for the discount rather than applying it automatically”.
But he added that it is not
all good news, pointing to the fact that local authorities in England are still
expected to rake in £25 billion in business rates overall during 2019/20, an
increase of £206 million.
According to the Federation
of Small Business, the 10 councils set to garner the most from rates over the
next 12 months are: Westminster (£2.2bn), City of London (£1.2bn), Camden
(£650m), Tower Hamlets (£461m), Birmingham (£449m), Hillingdon (£384m), Leeds
(£378m), Manchester (£335m), Kensington and Chelsea (£332m) and Southwark
(£328m).
The cash will be gleaned from
all sectors of the economy as the standard rate of tax will rise above 50 per
cent for medium to large-sized premises, the highest rate since the
national business rates system was introduced in 1990.
The Federation of Small
Businesses (FSB) also pointed to the fact that two million small businesses are
to be hit with new reporting requirements due to HMRC's Making Tax Digital
(MTD) programme.
HMRC is forcing
VAT-registered businesses to comply with the initiative, with the software
required to meet MTD obligations set to cost small firms £564 each on average.
More than a million small
employers are also grappling with a further increase in auto-enrolment pension
contributions to 3 per cent from Saturday.
Source: The Independent/PA
1 April 2019