Budget 2016: Small business rate relief increased permanently

At present small business rate relief is only permanently available to firms with a rateable value of less than £6,000.

However, the Chancellor has announced that the new threshold will raise to £15,000 – more than doubling the previous number – and will change permanently, rather than for just one year. The threshold for the higher rate has also been increased from £18,000 to £51,000.

The administration of business rates has also been ‘radically’ changed - from 2020, the uprating has been changed from the higher RPI to the lower CPI.

Osborne said:

“Business rates are the fixed cost that weigh down on many small enterprises.

“From April next year, 600,000 small businesses will pay no business rates at all. That’s an annual saving for them of up to nearly £6,000 – forever. A further quarter of a million businesses will see their rates cut.

“In total, half of all British properties will see their business rates fall or be abolished altogether.”

Melanie Leech, chief executive of the British Property Federation, comments:

“There is more that Government could have done, though, to really reform of the business rates system and we are disappointed not to see the Review suggest more frequent revaluations and greater rates relief for empty properties. Through business rates the UK levies one of the highest rates of property tax in the OECD and the tax’s hefty burden deters investment by both occupiers and landlords.”