Chancellor George Osborne used his Budget speech today to promise permanent changes to the way business rates are levied.

Bira comments on Budget

Chancellor George Osborne used his Budget speech today to promise permanent changes to the way business rates are levied.

The British Independent Retailers Association (bira), which has been campaigning on the rates issue since 2011, welcomed key announcements in the chancellor’s statement.

Bira said it had called for:

-a review of a thicket of temporary reliefs – shops with a rateable value (RV) up to £12,000 will benefit from a permanent exemption, tapering away for RVs up to £15,000.

– a permanently graduated rate to make the tax more progressive – the lower multiplier will apply for properties with a RV up to £51,000, raised from £18,000.

– a change from rises based on Retail Price Index (RPI), which is no longer a national statistic, to Consumer Price Index (CPI) – this will happen from 2020.

– the frequency of revaluations to be increased to keep valuations in closer touch with the real economy – the government has announced the aim of reducing this to a widely-supported gap of just three years.

Bira said the announcement will take 600,000 premises out of paying rates and benefit a further 250,000 above the threshold. This will help both the 64% of shops in England and Wales that have RVs up to £12,000 and those around the average RV of a shop, which is just over £27,000.

While welcoming the changes and the recognition that the Treasury has shown of the seriousness of the issue, bira also noted that:

– ‘The new thresholds apply from April 2017 and in the meantime all shops with RVs below £50,000 will be worse off than last year, as the chancellor did not reverse his removal of the discount of £1,500’.

– ‘CPI will apply to uplifts from 2020 – this could and should have been applied now’.

– ‘The fundamentals of the tax remain in place’ – bira has called for a ‘truly fundamental review of the rating system to make the tax fit for the business world of 2020’ and believes that this work should start today.

Bira ceo Alan Hawkins commented: “The government has listened to businesses and in particular to the High Street shops, whose business rates pain first alerted everyone to the damaging effects of this outdated tax. These changes go a long way to alleviating that pain in the longer term and bira welcomes that.”

He added: “The world of retail is still changing at a breakneck pace, so we believe that we must look beyond 2020 and create a tax system fit for the next decade – and further.

“That task of achieving truly fundamental reform remains – and bira is keen to engage in the process of achieving real change for the future.”
The bira reform proposals can be downloaded at www.bira.co.uk/assets/download/2981
 

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bira, the trade association for independent retailers, has commented on the Budget.

bira comments on Budget

bira, the trade association for independent retailers, has commented on the Budget.

bira comments on Budget

The Budget delivered on two of the three suggestions that bira made beforehand to build and sustain growth. These were: action on the job tax National Insurance, and action on Corporation Tax.

“But”, the association adds, “it kept the pressure on high street retailers, pressing ahead with a 2.6% increase in business rates, bringing down a blow weighing £175m on this buckling sector.

“The Chancellor”, bira continues, “should think on the fact that every independent that closes, shuts the door on 10 jobs.”

Here are bira’s comments on 10 of the measures announced by the government:

-National Insurance employment allowance will really help small businesses. We asked for a short holiday and got a bigger break.

-Corporation Tax, where the Chancellor met our request in full for a move to 20%. Not only will this help business, it will lessen the attraction for multinationals to find other, cheaper countries in which to pay their taxes.

-Scrapping the fuel duty increase for September is right and is welcome. This is becoming something of a ‘rabbit’ put into the hat to be pulled out in the Budget or the Autumn Statement. But it will at least help very hard-pressed consumers and businesses avoid a further turn of the cost-of-living screw.

-Funding for lending is to be boosted, but while the action so far has not benefited small businesses, banks have been eradicating business overdrafts. The government is deliberately ignoring this drain on the financial blood supply of small businesses.

-Supply side reforms switching current expenditure to capital investment should aid growth, but this comes in 2015-16 (an election year). Now would be better.

-Raising limits on employee loans will help families struggling to manage cashflow.

-Bringing forward the increase of personal allowances to £10,000 in 2014 will help the vast majority of families and this is unreservedly welcome.

-Tax free childcare benefit of £1,200 per child is welcome in helping families, although of course you still have to spend the other 80% of £6,000 to get the benefit.

-Shared equity loans and mortgage guarantees should help the housing market, the building industry and the many businesses that supply them.

-Tax reliefs to encourage private investment in social enterprises are very welcome.

The British Independent Retailers Association (bira) is the umbrella group for six trade associations representing independent retailers and dealers, including the British Hardware Federation (BHF) and the Cookshop & Housewares Association (CHA).

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