Under the scheme eligible ratepayers can receive 100% relief on properties with a rateable value (RV) below £6,000. For properties with an RV between £6,000 and £12,000, the relief is tapered from 100% to 0%.
For those with more than one property, the discount is only available if the RV of each of the other properties is below £2,600.
As part of the Autumn Statement revealed in Parliament, Chancellor George Osborne said: “The temporary doubling of the Small Business Rate relief scheme helps over half a million small firms, with 350,000 paying no rates at all. We’ve already extended it to next April. Today I extend it by a further year, to April 2014.”
He also announced cuts to corporation tax by 1%, which is set to fall to 22% in April 2013. “[We are] cutting corporation tax by a further 1%,” said Osborne. “From April 2014, corporation tax will stand at 21%. This is the lowest rate for any western economy. It is an advert to say Britain is open for investment.”
Osborne pledged a further £1bn to the new business bank, a Government-funded bank to help small and medium sized businesses.
The 3p rise in fuel duty, set to be introduced in January, has also been cancelled.
For empty property business rate relief, any commercial property that is completed between 1 October 2013 and 30 September 2016 will be free from rates for the first 18 months.
The British Property Federation welcomed this announcement. Chief executive Liz Peace said: “This is a welcome first step towards mitigating the damage being wrought by empty property rates.
“The Government is rightly desperate to get Britain building again. Introducing a grace period for empty property rates for new development will remove a millstone from around neck of the property industry, and let it get on with what it does best – investing in our towns and cities, regenerating communities and building the offices, factories and shops in which we work.
“However, we urge ministers to look further at how this tax on business failure continues to act as a drag on economic growth.”
The British Beer & Pub Association is disappointed with the lack of action on beer duty. Chief executive Brigid Simmonds said: “This is a missed opportunity – employment could be boosted by 5,000, this year alone, with a freeze in beer tax – mostly jobs for younger people in Britain’s pubs. The Coalition should distance itself from the previous Government’s tax policy, and the Chancellor should now heed calls from MPs of all parties for a review.
“However, there are announcements to welcome. As an industry that pays £11 billion in taxes each year – including excise duty, VAT, national insurance, business rates and corporation taxes – the beer and pub sector also supports the Government’s intention to ensure that all businesses contribute their fair share to support the economy.
“It is also reassuring to see that Government acknowledges that money does need to be invested in enforcement to crack down on tax avoidance, rather than lumbering UK businesses with the bill.”
James Shorthouse, head of Colliers International’s specialist division said: “The Chancellor’s decision to cancel January’s 3p fuel increase will bring a drop of seasonal cheer to leisure operators as their customers feel fractionally better off. Therefore we won’t see the usual Budget ‘double whammy’ of fuel and alcohol duty increases, leading to the increased cost of a pint.
“An extension of the small business rates relief scheme will help a few of the smallest pub and restaurants, and the reduction in corporation to tax to 21% will please those at the other end of the scale, but most leisure and hospitality businesses will see little upside from today’s Statement."
Don Baker, chairman of rating at CVS, said:“We welcome the Chancellor’s announcement to exempt newly-built commercial property from empty property rates. That’s one step in the right direction.
“However, by failing to lower high business rates bills the Government has missed an opportunity to help the vast majority British firms to beat the recession. The Government needs to look again at the business rates appeals system to reduce the 240,000 backlogged appeals and help firms lower their bills swiftly and with confidence. These businesses need their over-paid money returned to them now, so the Chancellor has missed a trick by resourcing HMRC to target tax evaders but not resourcing the Valuation Office to clear the rates bill backlog."