Originally written by Timothy Adler on Small Business
The government needs to say whether the current one-year business rates holiday for retail and hospitality businesses is going to be extended.
So says John Webber, head of business rates of property consultancy Colliers International, which has monitored the number of business rates appeals flooding the Valuation Office Agency (VOA), part of HM Revenue & Customs, which is tasked with processing complaints as part of a three-stage “check, challenge, appeal” process.
According to Colliers, some 170,000 businesses have taken the first step towards appealing against their rates since the pandemic began in the UK in March. That is more than the total number in the three previous years, during which 159,000 queried their rates.
>See also: Chancellor Rishi Sunak may scrap business rates in favour of a land tax
Partly, it’s the government’s own fault that the VOA is so swamped with business rates appeals.
Businesses are being forced into challenging ratings assessments now because the government has yet to announce whether the one-year business rates holiday for retail and hospitality announced in March is going to be extended.
Business rates are a tax on properties that are used for commercial purposes and are charged based on an estimate
Tag Archive for Business rates
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Chancellor Rishi Sunak may scrap business rates in favour of a land tax
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Chancellor Rishi Sunak may scrap business rates in favour of a tax based on tax values.
This land value tax would be levied on landlords, delivering a potential tax cut for hundreds of thousands of small businesses which rent premises.
However, any change could be years away, and for now the new chancellor will announce a “fundamental” business rates review in his March 11 Budget, according to The Times.
>See also: Hike corporation tax to cut business rates, urge retail bosses
A separate package of measures will be included in the budget to provide more short-term relief, the newspaper reported.
Small retail businesses complain they shoulder an unfairly high burden from business rates, which are based on shop rental values and are paid by tenants, rather than landowners.
The tax brings in about £30bn a year, making it the sixth biggest contributor to Treasury coffers, and is viewed by the government as easy to collect and hard to avoid. Rates have also become an increasingly important source of funding for local authorities.
>See also: Influential MPs call for government to rethink broken business rates
However, Ed Cooke, chief executive of retail group Revo said any change in business rates needs to
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Hike corporation tax to cut business rates, urge retail bosses
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Retail bosses will call for the Treasury to increase corporation tax in order to cut business rates by £6bn.
A sub-committee of the Retail Sector Council is reportedly calling for the Treasury to raise corporation tax by 2 per cent to 23 per cent to raise around £6bn a year by 2022/23. Other proposals cover VAT reform and tax and property cost transparency.
The group will make the recommendations in a document to be shared across Whitehall in the coming weeks, Sky News has reported.
According to Sky News, the extra revenue would be used to reduce the business rate multiplier to around 40p in the pound.
Corporation tax is currently 19 per cent for UK companies. During the election, Labour proposed increasing the rate to 26 per cent (with a lower 21 per cent rate for businesses with annual turnover of under £300,000).
High street decline
The Retail Sector Council was set up in 2018 to help address the decline of the UK high street and increase the productivity of the retail sector.
It is currently co-chaired by small business minister Kelly Tolhurst and former Co-op chief executive Richard Pennycook, who is also the chair of department store chain
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Small businesses applaud Conservative business reform pledges
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Business owners have given the incoming Government’s plans to invest in infrastructure and reform fiscal incentives a thumbs-up, according to two new surveys.
Both surveys, one from the Federation of Small Businesses and the other the Institute of Directors, were done post-election, when the Conservatives won a landslide majority.
Since then, Prime Minister Boris Johnson has claimed to hit the ground running, keeping the lights in Whitehall for the first 100 days of his administration.
>See also: General Election results leave ‘unanswered questions’ around IR35
Seven out of 10 small businesses say that the new Government’s pledge to invest £5bn to guarantee gibabit broadband would have a moderately positive (35 per cent) or very positive (34 per cent) impact. For firms based in rural areas, the figure rises to 72 per cent.
And the pledge to uprate the Employment Allowance – a discount on national insurance bills available to small employers – from £3,000 to £4,000 is also popular, with two thirds (65 per cent) seeing this as a positive step.
Nearly two thirds (64 per cent) of small businesses believe Conservative business reform pledges to overhaul business rates and extend the existing discount for hurting retailers will be
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Labour to stop rollout of Making Tax Digital to all small businesses if it wins
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Labour will stop the rollout of Making Tax Digital to all VAT-registered small businesses if it wins the general election.
Currently, MTD only applies to VAT-registered small businesses with turnover higher than £85,000. However, HM Revenue & Customs is planning to extend MTD to all VAT-able small businesses in its drive to find more revenue.
Rebecca Long-Bailey, shadow business secretary, told Radio 4’s Today programme: ““We’re going to scrap quarterly reporting for companies with turnover under £85,000.”
Long-Bailey was speaking on the morning Labour published its 20 Pledges to Business document, which encapsulates Labour’s thinking when it comes to helping small businesses, which Long-Bailey describes as “the lifeblood of our economy and our communities”.
>See also: Business rates reform key, says Labour business chairman Rachel Reeves
Although most of the 20 pledges have been announced elsewhere, those of most interest to small business are:
Reform business rates
Introduce statutory annual revaluations to stop small businesses facing periodic and unmanageable rate hikes
Guarantee a fair and transparent appeals process
Exclude new investment in plant and machinery from future business rates valuation to encourage investment
Establish a £250bn UK National Investment Bank
The National Investment Bank and a network of regional and national development banks will
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Sajid Javid warns Labour will extend inheritance tax to family businesses
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Chancellor Sajid Javid has warned that Labour plans to stop sons and daughters from inheriting family businesses by charging them inheritance tax.
Currently, family businesses are exempt from 40 per cent inheritance tax when a business is handed down to a family member following the death of the owner.
Labour plans to increase personal inheritance tax; currently, parents can leave property worth up to £325,000 before inheritance tax kicks in.
Sajid Javid said: “Labour has said they’re against the principle of inheritance, that’s why they’re changing inheritance tax for individuals, that’s why they’ve cut the allowance. They have also said they’re going to review taxes – and when they use code words like review, that’s the tax that’s they’re most certainly going to hit.”
>See also: Labour pledges to scrap IR35 rollout to business … and then backtracks
Javid was speaking at a hustings organised by the Federation of Small Businesses (FSB) this week, alongside shadow chancellor John McDonnell and Liberal Democrats deputy leader Ed Davey.
McDonnell, putting his head in his hands, shook his head and repeated, “We’re not.”
However, McDonnell, giving his usual avuncular performance, was frank about Britain needing to pay for investment in infrastructure and society
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Boris Johnson offers small firms nearly £500m worth of tax cuts
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Boris Johnson will gift small businesses £1,000 each and will cut business rates if the Conservatives win the general election.
Prime minister Boris Johnson will address the annual Confederation of British Industry (CBI) conference today as he tries to repair the Conservatives’ relationship with business, following his notorious “f**ck business” remark back in 2018.
Small business support is crucial to both Labour and the Conservatives. According to the Federation of Small Businesses (FSB), a typical constituency has 25,000 people working in a small business, around 7,000 of whom are self-employed.
The prime minister will pledge small firms a £1,000 tax break by lifting to £4,000 the employment allowance they can claim against national insurance contributions.
>See also: Business rates reform key, says Labour business chairman Rachel Reeves
“This will amount to almost half a billion-pound tax cut for small business,” said a Conservative Party statement.
Boris Johnson will also promise an immediate “fundamental review” of business rates – the property-based tax paid by companies that many businesses have complained about over the past two years – leading to a reduction of its “overall burden” on firms and employers.
Companies, notably retailers on struggling high streets have protested about rising business rates
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Influential MPs call for government to rethink broken business rates
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Parliament’s influential Treasury Select Committee has called on the government to examine alternatives to the broken business rates system.
MPs say that the government should examine alternatives to the current system in time for the chancellor’s Spring Statement 2020.
Unfair business rates penalising small businesses are seen as the number one problem affecting 5.7m SMEs.
>See also: Business rates reform key, says Labour business chairman Rachel Reeves
Business rates are outpacing inflation and growing as a proportion of tax paid by small businesses, say MPs, and this unfair system penalises high street shops and sectors like manufacturing over online businesses.
Experts have warned that high streets face the loss of 200,000 jobs unless the Government acts to revive traditional town centres hit by the rise of internet shopping.
The committee concludes that the complex web of reliefs currently available demonstrate that the current business rates system is broken.
However, MPs are unable to recommend any system to replace the current one, from a sales tax to an energy tax, profits tax, turnover tax or land value tax, as all have their own disadvantages.
Business rates generated £31bn of income for the government in 2018-19.
Alison McGovern MP, the Treasury Committee’s lead member
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Business rates reform key, says Labour business chairman Rachel Reeves
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Rachel Reeves, chairman of the Parliamentary business select committee, sees business rates reform as the tool to heal hurting small businesses.
Speaking at an event this afternoon organised by the Federation of Small Businesses, Reeves said the Government’s priority has been cutting corporation tax for corporates, while ignoring small businesses.
Reeves said: “Small businesses are the backbone of the economy. They’re where future profits, employment come from. Labour in government would do all it can to support small businesses so you can grow to create prosperity throughout the country.”
The Labour MP said that the burden of business rates was felt very keenly by small business.
“I would like to see the priority of business taxation to help smaller businesses and start-up businesses, rather than cutting corporation tax, which benefits larger businesses,” Reeves said.
“We hear time and time again of the challenges of business rates. Business rates reform need to be looked at in the round, rather than just benefiting large businesses,” the Labour MP said.
FSB policy head Martin McTeague added that a first step should be stop linking business rates to inflation, which would easily be within Government’s remit.
McTeague said: “Business rates are a broken system,
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Retailers call for Chancellor to fix ‘broken business rates system’
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Over 50 retailers have called for Chancellor Sajid Javid to fix the “broken business rates system”, which they say is key to boosting investment and revitalising the economy.
Some of the high street’s biggest names have written to the Chancellor, including national chains such as Greggs, Boots, Sainsbury’s and John Lewis.
“Retail accounts for 5pc of the economy but pays 10pc of all business taxes and 25pc of all business rates. The rate has risen by 50pc since business rates’ inception in the 1990s, and 20pc in the last decade alone,” said the letter, co-ordinated by the British Retail Consortium and backed by bosses of M&S, Iceland Foods, Primark and dozens more.
The letter asks for four fixes that would address many of the challenges posed by business rates:
A freeze in the business rates multiplier
Fixing transitional relief, which currently forces many retailers to pay more than they should
Introducing an “Improvement Relief” for ratepayers
Ensuring that the Valuation Office Agency is fully resourced to do its job
Implementing these four recommendations “could be undertaken quickly, would reduce regional disparities, remove barriers to the proper working of market forces, incentivise economic investment, and cut away at least some of the