The 2018 Autumn Budget brought a boost for tenants of shops, restaurants and cafes. Business rates will be cut by a third for two years for properties with a rateable value of less than £51,000. The business rate cut should provide relief to small high street retailers. The chancellor Philip Hammond announced the measure in his Autumn Budget on Monday 29th October 2018.
Business rates are the taxes imposed on commercial property. The tax is charged on offices, shops, restaurants, warehouses, pubs, and so forth. The majority of non-domestic properties will trigger a business rates liability.
Business rates are calculated from the property’s rateable value. The rateable value is multiplied by the relevant business rates multiplier to calculate the rates bill. You can use the government’s business rates calculator to estimate your rates bill.
The cut kicks in from April 2019 and according to government figures is forecast to save business £900 million. Hammond said it should generate an “average annual saving of £8,000 for 90% of independent businesses.”
Bricks and mortar retailers have been hit by rising overheads, a weaker pound and the growth of online shopping. It’s hoped this proposal will boost struggling retailers and encourage investment.
While any cut in business rates is to be welcomed, it’s important to point out this cut is for a proposed two years only. Most small businesses need to plan in advance of two years and so such a cut will likely have a minimal impact.
Many may well argue that longer term rates reform needs to happen to affect real change on the high street.
SMC Chartered Surveyors are marketing a number of retail properties which will benefit from the business rates cut. You can browse all of commercial property or call us on 0114 281 2183 to discuss your retail property requirements.