Chancellor 'set to cap business rate rises'

By Mark Wingett

- Last updated on GMT

Related tags: Chancellor george osborne, Taxation in the united kingdom

Business rates were set to rise by 3.2%, but it is thought Osborne will cap the increase at 2%
Business rates were set to rise by 3.2%, but it is thought Osborne will cap the increase at 2%
The chancellor George Osborne is to cap increases in business rates in Thursday’s Autumn Statement in a bid to boost businesses and the High Street, according to the BBC.

It reports that Osborne will announce that rate rises will be limited to 2% in England and Wales next year instead of being linked to inflation.

He will also extend a scheme that offers rate relief to small businesses.

However, the BBC believes he will stop short of a full review of a system widely seen as outdated despite calls for such a move by some industry groups, as well as Business Secretary Vince Cable.

Business rates were set to rise by 3.2% next year, based as usual on the September retail prices index measure of inflation.

It is understood he will cap the increase at 2%, a move which will mean more than £300m of revenue is lost next year.

Better Rates for Pubs

Reports state that Osborne will also announce the extension for another year of a scheme which gives small firms relief from rates liability.

A recent PMA survey, conducted as part of the Better Rates for Pubs campaign, found that more than half (51%) of publicans described the payments as having a ‘major impact’ on their pub’s profitability.

Close to half (45%) said that rates accounted for between 6% and 10% of their turnover, while nearly one in three said they took up more than 10%.

Industry response

A British Beer & Pub Association spokesperson said: "A cap on Business Rates is a step in the right direction that would enable pubs to avoid £7.8 million on the currently proposed increases. However, it still represents a £13 million increase in rates for pubs, and does not address the burden of Business Rates on pubs across the country.

“Announcements that would extend Small Business Rate Relief would be welcome and we are asking the Chancellor to consider increasing the threshold on rateable values eligible for SBRR, potentially benefiting thousands of pubs.”

Related topics: Legislation

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