Plans for business rates reform
29-Jan-2014David Cameron has pledged to discount business rates and potentially scrap them altogether in the future. Tax on commercial property has been a huge issue for many retailers, both high street and online, which we highlighted in our blog back in November. With many forced out of property due to the high rates, the government are finally focusing on this issue and are set to reveal their latest plans today.
A £415 million ‘package’ of investment will be revealed today by Eric Pickles, the Community Secretary, to help lower tax rates for small businesses. He and Cameron hope to lead the way on a business rate reform to support struggling retailers, businesses and local economies. Mentioned in the Autumn Statement, part of the package will include a rate discount of £1000 for 300,000 small shop owners.
At a recent conference with the Federation of Small Business, Cameron stated, ‘I think we do need to look at longer term reform. We've got to start addressing this issue, particularly this issue about internet retailing and high street retailing.’
Viable internet businesses are suffering because of high tax business rates on commercial property. Director General of BRC said, ‘Whether retailers operate online, through physical shops, or through multiple channels, the current system is outdated and disincentivises businesses from investing in property. Our members are clear that a fundamental change to the system will unlock new investment and jobs across the UK’.
The British Retail Consortium (BRC) has been working with accounting firm, EY, to tackle this tax issue by finding alternative business and tax rates to use.
George Osborne will be presented with this research in February with plans to address the issue of a much needed reform at the next revaluation of property in 2017.
If your business is finding it difficult to meet high tax rates, we can help. A Company Voluntary Arrangement gives you the opportunity to pay back debt over time, protect your business against aggressive creditors and write off some of your unsecured debt. Local business rates are an unsecured debt so arrears could partially be written off. Speak to our experts on CVAs on 0800 9700539.