Gifts Today magazine

Budget 2017

Capped rates for small businesses and 2% economy growth forecast

The Chancellor Philip Hammond has addressed growing concerns over business rates in today’s Budget speech.

Small businesses in England that are losing their rate relief will benefit from a measure to cap rising rates to a maximum of £50 a month. Those same businesses, like independent retailers, could also take advantage from a £300 million discretionary relief fund which local authorities can allocate in response to 'local circumstances.'

The Chancellor said the measures are 'targeted at those small businesses facing the biggest increases.'

But critics said the moves were not sufficient to address the disproportionate rise in rates between high street bricks and mortar businesses and those that trade online.

'Some city centres are saying their Business Rates are rising by around 50 per cent while e-tailers such as Amazon may even see their rates fall on out of town distribution centres,' warned David Jinks MILT, Head of Consumer Research at parcel broker ParcelHero. 'More needs to be done to save the High Street and look at the disparity of taxes and rates between online and brick and mortar retailers.'

Phil Mullis, Head of Retail and Wholesale and Partner at accountancy firm Wilkins Kennedy agreed, calling the lack of government action on the issue 'disappointing.'

'This is a major area in need of addressing, but first, there needs to be an urgent overhaul throughout,' he added.

The Chancellor conceded in his speech that more effective means of 'taxing the digital part of the economy' were urgently needed.

Overall the economy was forecast to grow 2 per cent in 2017, an even sunnier outlook than the 1.4 per cent growth previously predicted, and a prediction that defies post-Brexit doom mongering.

National living wage will also rise to £7.50 an hour from April, as previously announced in November.

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