Businesses welcome Chancellor’s announcement on rates and late paymentsHeat Profit
CHANCELLOR Philip Hammond spring statement was short on big announcements but news that the government will bring forward the next revaluation of business rates from 2022 to 2221 caught the attention of business leaders.
This is part of plans to re-value rates every three years, meaning changes in business rates will be less dramatic at each revaluation.
Mr Hammond also confirmed the government will not be opting for a self-assessment style system for business rates, a change that was being considered ahead of the Autumn Budget.
Mr Hammond unveiled a series of consultations on future policies including
– A reduction in tax on for the least polluting vans
– A possible tax on single-use plastic
– A new ‘tech tax’ looking at how firms like Google and Facebook are taxed
– £80m of funding to support small businesses
– Measures to end late payments for firms
– The future of cash and digital payments
Responding to the statement, Ross McNally, executive chair of Hampshire Chamber of Commerce, said: “He still needs to do more on business rates, an iniquitous tax that takes no account of profits or ability to pay.
Bringing forward the next revaluation by a year helps a little bit but we still seek structural reform to make the system fairer.
“The Chancellor indicated support for small firms keen to employ apprentices but the complexity and rigidity of the apprenticeship levy is affecting larger businesses and needs to be addressed.
“We are pleased that he is looking to use the government’s convening power to tackle the issue of late payments which can cause huge problems for small businesses and suppliers.”
Tim Walker, MD of IT Services provider Aura Technology, welcomed Investment in high street broadband and for the first 5G test beds.
“The consultation on measures to encourage digital payments is also promising – the way we transact business as consumers has changed beyond recognition in the last decade, but business has been slow to catch up with late payments and old-fashioned payment practices holding up progress,” he said.
“The decision to bring forward the planned business rates reductions and reviews will obviously be welcomed, although I would like to hear more concrete initiatives in the full Budget in the Autumn. It would be good to see an extension and widening of Investment incentives such as SEIS and EIS along with further tax incentives for entrepreneurs.
“As a company that is actively recruiting and training staff, we welcome the release of £80m of funding to support small businesses with funding apprenticeships, which is crucial for advancing skills and helping employers fund loyal and long-term staff who can be an asset from the start of their careers.”
Mr Hammond hailed the first “sustained fall in debt for 17 years”, expected to begin next year and increase in tax receipts.
Trudi Amy, director of tax, Grant Thornton UK LLP Southampton office said this was cause for optimism.
“In the short to medium term the forecasts look good – higher tax revenues result in government surpluses so as to pay down the UK’s eye-wateringly high debt,” she said.
“The Chancellor was confident on growth, on inflation and interest rates and as a result, confident that earnings will start to rise in real terms – vital for so many just about managing.
“What this also means is that by the time of the Budget in the autumn we can expect announcements that increase funding on essential public services.
“This suggests not only the NHS but also in respect of adult and child social care.
“It may also impact on infrastructure too as that was mentioned several times.”