bira believes that the Chancellor’s Budget does not deal with the fact that business rates are fundamentally unfair.
The Chancellor has taken some responsibility in acknowledging that there is a problem by providing some relief for small businesses. However, considering that the same re-evaluation has reduced the average bill for Amazon’s nine distribution centres by an average of 1.3% or £147,632 , it is scant consolation for small businesses that no longer qualify for SBBR business rate relief, that they will see their rates bill next year increased by a maximum of £50 a month.
In addition, whilst the Chancellor has announced that pubs will have a £1,000 discount on their business tax bills if the rateable value of the property is less than £100,000, there is no mention about a potential relief for independent retailers. This is even though the retail sector contributes almost a quarter of all business rates compared to the 4% contribution of business rates in England and Wales by the pub industry . Therefore, some consideration towards independent retailers would be to everyone’s benefit as it would help a huge number of businesses maintain their profitability and contributions to the exchequer through other taxation methods.
The Chancellor could argue that this help will be available through the £300m fund he has promised to Local Councils so that they can help hard up cases in their area. However, this is again a drop in ocean considering the plight of the independent retail industry. In addition, there must be a transparent and standardised application process for local businesses to apply for this fund even though it is administered at a local level. Otherwise, there is a real risk of a postcode lottery for small businesses already under a lot of pressure, which could put those businesses struggling most off applying in the first place.
Finally, it must be acknowledged that the Chancellor has committed to reviewing the effect of the business rates re-evaluation. However, the fact that he has stated that this will be “before the new re-evaluation”, means that bira wishes to remind the Chancellor that the next re-evaluation will be 4 years away. As an organisation, we therefore support Andrew Tyrie, Chairman of the Treasury Committee, who stated in his budget contribution that re-evaluations should happen more often as this would mean that this consultation on the 2017 re-evaluation will have to happen sooner, as opposed to being kicked into the long grass.
Alan Hawkins, bira CEO said “overall a disappointing budget with those seriously affected by the latest rates changes getting scant relief unless very small. Many bira members who are self employed will be caught with more National Insurance even though the benefits they get compared to PAYE employed are significantly different and not as similar as the Chancellor would like us to believe.”