Small Firms May Be Set For Lower Business Rates

Smaller firms may pay reduced business taxes in future if planned reforms go ahead.

Robson Laidler LLP, accountants, are saying that planned reforms to business taxes could lead to smaller firms paying a reduced rate in future.

Proposals in the government’s new Localism Bill will see the Small Business Rate (SBR) automatically applied to all qualifying premises in England.

Graham Purvis from Robson Laidler LLP said “Firms with multiple premises rated at less than £18,000 each should be left better off as the current single premises requirement is to be axed, allowing firms to automatically receive a relief of 0.7 pence against the uniform business rate of 41.4 pence. This could benefit up to half a million businesses.”

“However, firms will still need to apply for Small Business Rates Relief worth up to 100 per cent of the tax due, which applies to premises with a rateable value of less than £12,000”.

The Federation of Small Businesses said the decision to automatically charge small firms was a ‘step in the right direction’ but it would continue to push the government to fulfil the Conservative Party’s pre-election pledge to also make rate relief automatic.

The Localism Bill will also allow local authorities to offer discounted rates in their areas, to stimulate business growth, although they must fund these cuts themselves.

Councils will also still be able to set supplementary business rates to pay for additional projects in their area, but businesses must now be given the chance to vote on all such proposals. Previously this was only the case if they were being asked to fund more than one-third of the costs involved.