Business Rates – Budget 2015

Pilot Scheme Introduced 

Within the budget today The Chancellor has announced that in a pilot scheme Greater Manchester council and Cambridge can now keep 100% of additional business rates collected above existing forecasts.

The Chancellor also encouraged other councils wanting to take part to come forward.

This is what the budget actually states about this pilot scheme :

“As part of the government’s work to strengthen the financial incentives to encourage business growth, Budget 2015 announces pilot schemes in Cambridgeshire and Peterborough and, subject to the formal approval of Greater Manchester Combined Authority, in Greater Manchester and Cheshire East, which will enable these areas to retain 100% of any additional business rate growth beyond expected forecasts. These pilots will begin in April 2015 and will reward additional growth to the local business rate base whilst maintaining the nationwide business rate retention and redistribution system.”

Rates Relief 

In the Autumn Budget at the end of 2014 The Chancellor announced that small business rates relief would be extended, as would the retail relief and this was further confirmed today. As a reminder, small business rates relief will be extended for a further year  and retail relief will be also be extended for a further rating year as well as being increased from £1,000 to £1,500.

There will also be a consultation of business rates relief for local newspapers : “Local newspapers are an important source of information for local communities and a vital part of a healthy democracy. To support them as they adapt to new technology and changing circumstances, the government will consult on whether to introduce a business rates relief for local newspapers in England.”

Review of the Business Rates System 

The Chancellor also confirmed that the current system has not kept up with current high street usage and the way business has grown and developed. He announced that ‘far reaching’ reform is needed and has confirmed that a full review into the administration and business rates system in general will go ahead with any announcements due for 2016. We have already discussed this review here, when it was announced late last year before the autumn budget. To quote the budget its self : “The government wants to ensure that the tax system provides stable and sustainable revenues to fund public services in the least distortive way. The government is therefore conducting a broad review of business rates to ensure that they are fit for purpose for  a 21st century economy. The terms of reference for this review were published on 16 March 2015.”

Posted on: 18/03/2015