Budget 2016: Osborne announces cut to business rates, removing 630,000 small businesses from paying any rates at all from next year

 
Billy Bambrough
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George Osborne wants to cut rates for a "nation of shopkeepers" (Source: Getty)

The chancellor George Osborne has announced that 630,000 small business will pay no business rates at all from next year, as he cuts business rates across the board.

Osborne claims the reduction will save £7bn per year for businesses.

There will be a new threshold for small business rates, more than doubling entry level of tax on commercial property from £6,000 to a maximum of £15,000.

George Osborne said:

A typical corner shop will pay no business rates, getting rid of a tax for small businesses in a nation of shopkeepers. This is a Conservative government that is on your side.

Higher rate relief was also raised, from £18,000 to £51,000.

In the Budget, the chancellor also announced that future business rates increases will be based on the consumer price index rather than the retail price index, intended to give more accurate rates bills for retailers.

The Association of Convenience Stores (ACS) has welcomed the announcement.

ACS chief executive James Lowman said: "The increased small business rate relief threshold will be a welcome measure for thousands of local shops who are facing rising costs in other areas of their business. This measure will also significantly reduce the burden on the VOA, as more stores are taken out of paying rates altogether. We welcome the move from RPI to CPI for annual business rate increases but urge the Chancellor to cap rates increases in line with the Government's two per cent inflation target."

Small firms will also benefit from a cut to commercial stamp duty.

Some 90 per cent will pay less, or be unaffected, although nine per cent of firms will pay more. The changes will raise £500m a year.

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