Government Announces Business Rates Review

Chancellor George Osborne has confirmed at today’s Autumn Statement a comprehensive finance support package for small and medium-sized businesses (SMEs) as well as announcing a review of business rates.

Describing them as the ‘lifeblood’ of the economy, the Treasury and the Bank of England has said that it will extend the Funding For Lending (FLS) scheme by another year to January 2016.

Launched in 2012, FLS involves the Bank of England to allow commercial lenders to borrow funds from it cheaply so that they can pass this on in the form of low cost loans to firms.

He also pledged an extra £400million for the British Business Bank, which has so far supported 38,000 businesses.

Mr Osborne said: "The Government's long term economic plan is working with the Funding for Lending Scheme playing a vital role in supporting the recovery.

"Now that credit conditions for households and large businesses have improved, it is right that we focus the scheme's firepower on small businesses, which are the lifeblood of our economy.

"That's also why we've reformed the banks, introduced the British Business Bank and are now focusing the Funding for Lending Scheme on supporting them."

In addition to the new financial package, The Chancellor confirmed that it would carry out a review of business rates.

Other announcements included a research a development tax credit increased for small and medium-sized firms.

Expert Opinion

This is a welcome economic shot in the arm for SMEs. The Chancellor has recognised the importance of smaller firms to the UK economy and this financial package will go some way to helping many fund their expansion plans – something that we know there is strong appetite for. <br/> <br/>“A long-term approach is however vital and rather than looking at just the next few years, it needs to put SMEs at the heart of its long term decision-making. Access to finance is just one area and it is vital that in order to rebalance the economy effectively, the Government must look closely at other areas such as exporting. The Government has said that it wants more companies to increase their overseas’ trade and announced a £45m package, but more detail and practical advice is required on how SMEs can do this. <br/> <br/>“We also welcome the Government’s announcement that it will review business rates. This is long overdue and we look forward to further details.” <br/> Steven Beahan - Partner