Spring Budget 2017: Business and Business Rates

By SME Insurance

Posted 03/04/17

Chancellor Phillip Hammond announced his Spring Budget on 8 March 2017. This article takes a quick look at his update and plans for business and business rates.

The Business Landscape

Offering a review of the business landscape, the Chancellor painted a mixed picture.  Business investment fell by 1.0% in Q4 2016, he explained, following a modest increase of 0.7% in Q3 2016. Overall, that resulted in a 1.5% decline in business investment during 2016. [1]

In response, he pointed to an increasingly favourable corporate tax environment, which has fallen from 28% to 20% since the Conservative Government came to power. [2] The Chancellor announced plans to continue the trend, cutting corporation tax rates to 19% in April 2017 and to 17% by 2020. [3] 

Business Rates

In the run-up to the Spring Budget, business rates had been the big talking point – with plans to revalue property expected to which would significantly increase the tax burden for many businesses.  The burning question was whether the Chancellor would set out any modification to those plans, or seek to placate their critics.

In the event, he made a number of announcements designed to help soften the blow for those businesses affected by likely rate rises. They included:

  • A package of business rates cuts worth £9 billion. [4]
  • A commitment to permanently double the small business rate relief to 100%. [5]
  • Raising the business rates threshold so 600,000 SMEs will be exempt paying rates. [6]

In addition, he explained that any SMEs coming out of small business rate relief will benefit from an additional cap - none will see bills rise by more than £50/month, and further increases will be capped at either transitional relief cap or £50, whichever is higher. [6]

Coupled with £1,000 discounts on business rate bills in 2017 for pubs on rateable value less than £100,000 and a £300 million fund for local authorities to deliver discretionary relief, will create a further £435 million cut in business rates, he explained. [7]

The measures, he said, were designed to target SMEs facing the biggest increases, protect pubs, and give local authorities the resources to respond flexibly to local circumstances. [8]

Finally, he said that the government will seek to reform the revaluation process, to move to a smoother and more frequent process – to make the dramatic increases that the present system can deliver, a thing of the past. [9]

Sources

[1] http://www.telegraph.co.uk/business/2017/03/08/spring-budget-speech-full-annotated-guide/

[2] http://www.bbc.com/news/live/business-39155802

[3] https://www.gov.uk/government/publications/spring-budget-2017-documents/spring-budget-2017

[4] https://www.gov.uk/government/speeches/spring-budget-2017-philip-hammonds-speech

[5] https://www.gov.uk/government/publications/spring-budget-2017-documents/spring-budget-2017

[6] https://www.gov.uk/government/publications/spring-budget-2017-documents/spring-budget-2017

[7] http://www.mirror.co.uk/news/politics/jeremy-corbyn-budget-response-transcript-9990285

[8] http://www.telegraph.co.uk/business/2017/03/08/spring-budget-speech-full-annotated-guide/

[9] http://www.bbc.com/news/live/business-39155802  

Posted 03/04/17

Author: SME Insurance

Want more? Subscribe to our bulletin

Log your renewal
Need a reminder?
Latest from SME

Are you Putting Your Shop at Risk?

The Price of Underinsurance Could be Devastating to Your Business

Four Walls Marketing: How to Save a Failing Pub

Using four wall marketing to encouraging repeat business and customer loyalty is more valuable than enticing a new customer through the doors for a…

The Last Straw: What is Britain Doing to Reduce the World's Plastic Waste?

Many UK businesses have already started to commit to reducing their plastic waste by phasing out plastic straws. Will you be joining them?

These 4 essential tips from successful businesswomen could help your business

We've taken a look at a few of the world's most successful businesswomen to see what other entrepreneurs can learn from them.

Quotes from a panel of UK Insurers