Chancellor Introduces A Cap On Business Rate Increases in Autumn Statement
Chancellor George Osborne has announced a number of new initiatives in his Autumn Statement aimed at supporting growth amongst small and medium-sized businesses.
One of the key initiatives introduced relate to business rates which will now be capped at 2 per cent in England and Wales.
Next year they were due to increase by 3.2 per cent, based on the retail prices index measure of inflation which was recorded in September.
The chancellor said that £1,000 would also be knocked off the bill for businesses who occupy a building with a rateable value of £50,000.
This decision coincided with an announcement that he has also extended a scheme that offers rate relief to smaller firms for another year.
Other announcements included an additional 50,000 start up loans for entrepreneurs and extension to new Enterprise Allowance. Employer national insurance contributions on workers aged under 21 will also be removed.
Reporting on the current economy, George Osborne said the economy is forecast to grow by 1.4 per cent this year.
Beyond this, growth is forecast to be 2.4 per cent in 2014/15. For the following four years it will be 2.2 per cent, 2.6 per cent, 2.7 per cent and 2.7 per cent.
Unemployment is predicted to fall from 7.6 per cent this year to 7 per cent by 2015 and to 5.6 per cent by 2018.
The announcement that the economy is growing faster than originally anticipated is to be welcomed and the UK’s smaller businesses should be congratulated for the part that they have played.
“The key announcement for SMEs related to business rates. Although it shows that the chancellor is listening to the concerns of enterprise, I do however suspect that there will be many that think that he has not gone far enough, such as freeze the increase until a rating revaluation has been completed.”
Fergal Dowling - Partner