A new Budget is always eagerly awaited by small businesses, and with news of a revaluation of business rates, this is a worrying time for many SMEs.
In the Spring Budget 2017, there was an announcement that a rise in business rates would come into effect on 1st April 2017. This revaluation is intended to address the changing value of the property market and means many businesses in thriving towns and cities will end up paying more than those in less affluent areas.
Is there any help for small businesses?
Although the threshold for business rate relief, which offers a discount to businesses with a lower rateable value, will rise at the same time – from £12,000 to £15,000 – some businesses will inevitably lose out.
There were three key measures mentioned in the Budget designed to reduce the impact on small businesses:
1. Any business set to lose small business rate relief will have their rates capped at an increase of £50 a month for five years.
2. Pubs with a rateable value under £100,000 will be eligible for a one-year £1000 discount.
3. A £300m hardship fund will be set aside for councils to access should they need to provide relief to struggling businesses.
The impact of a rise in business rates
A rise in business rates may have immediate knock-on effects in terms of employee recruitment and staff wages. Some businesses may need to increase their prices to counterbalance the rise in business rates.
What should SMEs do to prepare?
It’s important to inform the Valuation Office Agency of any new rental evidence to ensure you receive a new accurate rateable value which means you won't be under or overcharged. The new measures are designed to minimise the impact of the rate changes, giving business owners ample time to prepare for the hike.
The start of a new financial year is always a good time for SMEs to start thinking about getting their accounts in order. With business rate increases adding to the nightmare, trying to save money wherever possible will be more important than ever. To find out more about business rates you can click here.
For small business accountancy advice, speak to us by calling 01623 490 120 or email