Retailers face a 2% business rates rise from today as the Government implements its £1bn support package to help revive the high street.
From today, businesses with a rateable value of up to £50,000 will recieve a £1,000 discount on their business rates for the next two years. Also, new occupants of retail premises that have previously been empty for a year will be able to claim a 50% discount off their rates bill, while all businesses will be able to pay their bills over 12 monthly installments rather than 10.
The measures were first announced during the Chancellor’s Autumn Statement in December.
Retailers had been braced for a 3.2% increase to business rates but following a high profile campaign from UK retailers, the Government decided to cap it at 2%.
Eric Pickles, Secretary of State for Communities and Local Government, said: “A key part of the government’s long-term economic plan is to back business with lower taxes. Small shops are the lifeblood of local economies, and today’s changes will mean a massive boost to our town centres - helping to create more jobs and securing a better future for our children.
“A whole string of changes to business rates kick in today bringing new support to local shops, pubs and firms. In some cases shopkeepers could see their bills cut by a third extra or even more, which is worth thousands of pounds in tax breaks.”
Helen Dickinson, director general of the British Retail Consortium, said the retail body welcomed the wave of measures.
“The measures employed today will help boost confidence in the sector, support retailers to keep prices low and safeguard 7,500 retail jobs in the coming year, as well as support local communities by keeping more shops open.”
Business rates is the biggest concern among retailers who say the excessive property tax is unfair and restricts investment and job creation. Retailers have fiercely criticised the Government’s decision to delay the commercial property revaluation by two years to 2017 meaning retailers will continue to pay rates based on pre-recession figures.
Retail expert Paul Turner-Mitchell said: “Next year the wealthier parts of the country would have experienced large increases in their rates bills through a revaluation, but they will now get just an inflationary increase coupled with a £1,000 discount.
“Conversely in other parts of the country where rents have tumbled, those retailers would have been far better off under a rates revaluation instead of Osborne’s discount. In some parts of the country business rates are at such an unsustainably high level that only radical reform can bring them down to a level where businesses can prosper again.”