Small businesses have called on chancellor Sajid Javid to make “radical business rates reform” a key part of the upcoming autumn budget to address the unprecedented slump in confidence among smaller firms.
Javid is planning to hold a budget on 6 November, a week after the scheduled Brexit date of 31 October. He has pledged to launch an “infrastructure revolution,” suggesting a major spending splurge.
On Saturday, however, Prime Minister Boris Johnson formally requested an extension to Britain’s stay within the European Union. The Treasury has not said whether a budget will go ahead should Britain not exit the EU on 31 October.
Today, the Federation of Small Businesses (FSB) said Brexit had left firms “hamstrung by uncertainty for the past three years”. It said Javid should dramatically change the rules on business rates – taxes on commercial property.
Primary among the FSB’s requests was that small retailers whose so-called rateable property value is under £51,000 be allowed to claim up to 50 per cent off their rates bills. This would be a major increase from the current allowance of up to 33 per cent relief.
It also called for the small business rates relief threshold to be more than doubled from £12,000 to at least £30,000. “The threshold has remained largely static in recent years,” the FSB said, despite Rateable Values “surging in many parts of the country”.
“Small businesses have been left hamstrung by uncertainty for the past three years,” said FSB national chairman Mike Cherry. “We need to see the chancellor step up to the mark next month with measures that will re-inject optimism into the small business community and enable growth. Otherwise, we’re in for a very bleak winter.
“Business rates reform must be a priority. This unfair, regressive tax – which hits firms before they’ve made their first pound in turnover, let alone profit – continues to threaten the futures of small firms all over the country.”
Cherry said business rates discourage investment. “You spend money on bettering your property… and the next thing you know your rates bill has shot up. It’s ludicrous.”
The FSB said small firms had also been hard-hit by April’s increase in the minimum wage to £8.21 an hour for over-25s from £7.83. Last month Javid unveiled a plan to increase Britain’s minimum wage to around £10.50 by 2024.
Cherry said the increase would heap “obligations on businesses without providing any reliefs or incentives”. He added: “There needs to be some give and take here” and encouraged the government to provide relief to help small businesses with higher wage costs.
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