Philip Hammond 'to woo small business by scrapping business rate rise'
2 min read
Philip Hammond is set to hand small business owners a boost by toning down a planned hike in business rates in the upcoming Budget.
The Times reports that the Chancellor has responded to lobbying from business groups such as the CBI and the British Chambers of Commerce to halt a 3.9% increase in rates due to kick in next spring.
Rates had been due to rise by the same rate as the Retail Price Index of inflation, rather than the lower Consumer Price Index, which currently stands at 3%.
The Government had planned to move the rates into line with CPI by 2020, but it it understood Mr Hammond is now willing to do so as early as next year.
According to calculations from the British Retail Consortium, that could save businesses some £270m from their tax bills.
Many small firms have already been hit hard by revaluations of business rates, which are based on the value of premises rather than a company's revenue.
The revaluation came in for fierce criticism as it was deemed by many to favour large online retailers at the expense of traditional bricks-and-mortar businesses.
VAT FREEZE
The Times also reports that the Treasury are considering changing the threshold before business have to pay VAT, currently set at £85,000 of turnover.
Officials are said to be concerned that some firms and freelancers deliberately shut up shop before they reach that level to avoid having to charge customers the extra 20% tax.
The Office of Tax Simplification has worked out that raising the threshold to £90,000 would cost the Treasury just £100m but save some 30,000 businesses from having to collect the tax.
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