CHANCELLOR’S BUSINESS RATES PLEDGE WILDLY MISLEADING
Half of businesses within the scheme are ineligible for any form of relief
Measures confirmed by the Chancellor in his Budget promising business rates relief to struggling retailers have been branded ‘misleading and inaccurate’ by property consultancy Gerald Eve, whose data shows that only about half of Hammond’s estimated 496,000 businesses will be eligible for the new relief.
Plans to cut rates bills by a third for almost half a million small retailers – as announced by the Treasury before today’s Budget – have been met with a largely positive reaction, but are highly unlikely to be fully realised. Gerald Eve’s research shows that of the 496,000 businesses highlighted by the Chancellor, more than a third are already eligible for 100% small business rates relief and thus have no rates liability to be cut further.
Furthermore, much of the remainder is made up of larger retailers and chain stores – whose trading difficulties are well publicised – and they are unlikely to see their rates cut due to European State Aid limits, which prevent any business from receiving more than €200,000 in aid (including rates relief) over a three-year period.
Jerry Schurder, head of business rates at Gerald Eve, said: “This is the ultimate sleight of hand, promising benefits to a host of businesses who simply won’t be in a position to receive them. As with so many headline grabbing business rates announcements from Government over recent years, this pledge simply doesn’t stand up to scrutiny. The claim that almost half a million business will directly benefit from savings is wholly misleading.
“A 33% rates cut is precisely what all businesses need, not just small retailers, but the Chancellor is deceiving ratepayers with his massively inflated estimate of the number of likely beneficiaries.”
“This is just another sticking plaster over the business rates wound. Nothing short of fundamental reform with a significantly reduced burden for all businesses in all sectors will suffice. It is time the Chancellor grasped the nettle rather than deliver flimsy initiatives that prove to be almost undeliverable in practice.”
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Note: The Chancellor claimed in a pre-Budget announcement that 496,000 small retailers with assessments below Rateable Value £51,000 will see their bills cut by one third for the next two years. Gerald Eve’s research reveals that within the 496,000 there are 328,211 with assessments below £12,000 which thus potentially exempts them from any rates liability under the Small Business Rates Relief scheme.