Business rate changes: Small beer?
08 March 2017
Chris Sanger, head of tax policy, EY, comments on Spring Budget business rate measures:
Business rates featured today in a budget with very few tax changes, but even here the changes were small and focused on the smaller business community. Following furore over the increases arising from the revaluations, the Chancellor announced a discretionary support fund, some targeted support for Small Business Rate relief recipients and a special £1,000 discount for small pubs.
These changes will be welcome by those receiving them, but they still don’t address the underlying tax hike – from the 41.4% rate imposed at the last valuation to the 48% rate coming into force in April. Large businesses, which have had little help in either this or the last Budget, still face some of the highest property taxes in Europe. Given that business rates are paid even before a single pound of profit is made, this can act as a real deterrent to UK investment.
The Chancellor hinted that he would be looking at “a better way of taxing the digital part of the economy” in the medium term, but gave no details or timeline. This was an issue ducked by his predecessor in the recent consultation on reform, so perhaps he was wise to avoid committing himself.
So those pint-pulling publicans may well be happy, but online shoppers have been warned! As for larger businesses, in was another dry Budget.