Government announces £2.3bn business rates support
There was good news for those campaigning against the current business rates system in the Budget today.
The government said it would provide a further £2.3bn of support over the next five years to businesses to reduce the burden of business rates, and that rates evaluations would take place every three years.
Chancellor Phillip Hammond announced he would bring forward the planned business rates switch from RPI to CPI by two years, to April 2018.
Calling small businesses “the backbone of the economy”, Hammond also said he would freeze the VAT threshold at £85,000 for the next two years.
The Chancellor also had good news for pub operators, adding that he would extend the £1,000 discount for pubs with a rateable value of less than £100,000 for one more year to March 2019.
Hammond said that the government will be legislating retrospectively to address the so-called “staircase tax”. Affected businesses will be able to ask the Valuation Office Agency (VOA) to recalculate valuations so that bills are based on previous practice backdated to April 2010 – including those who lost Small Business Rate Relief as a result of the Court judgement. The government says it will publish draft legislation shortly.
Today sees restrictions on one-off company ventures, making it harder for them to attract invaluable capital from investors and business angels through Enterprise Investment Schemes (EIS) and Seed Enterprise Investment Schemes (SEIS).
The use of these schemes aren’t tax avoidance, but in today’s Budget the government is clearly favouring longer-term growth companies and excluding short-term ventures. The rule changes will make it much harder for Special Purpose Vehicles (SPVs) such as some in the film industry to raise finance, though Film Tax Relief would still be available on the company’s qualifying costs.
Mainly companies will feel rightly aggrieved by the government moving the goal-posts here. Some sectors naturally lend themselves to one-off SPVs and they will now struggle to raise finance.
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