News story

British businesses boosted by tax changes coming into effect in April

This month, a number of new tax changes come into effect, benefiting millions of businesses across the UK.

Graphic of cartoon office buildings

Millions of businesses across the UK will benefit from new tax measures coming into effect in April, including a £9 billion cut in business rates, a further reduction in corporation tax to 19% and a continued fuel duty freeze.

Financial Secretary to the Treasury, Jane Ellison said:

We’re committed to a business tax regime that supports enterprise and allows our entrepreneurs to take advantage of new and exciting opportunities to grow and create jobs.

From April 600,000 small businesses will be removed from paying business rates altogether and the new reduced rate of corporation tax will free businesses to invest, grow and create jobs.

Corporation Tax will be reduced from 20% to 19% from 1 April 2017

To support investment, growth and job creation the main rate of corporation tax will be cut again to 17% by 2020, by far the lowest in the G20 and benefitting over 1 million businesses.

Business rates: permanently doubling the Small Business Rate Relief and extending thresholds

From 1 April 2017 properties with a rateable value of £12,000 or less won’t have to pay business rates meaning 600,000 properties will be taken out of rates forever. To make sure there’s not a cliff edge, for properties with a rateable value of £12,001 to £15,000, the rate of relief will go down gradually from 100% to 0%.

That means that for a shop with a rateable value of £6,000, its owners will save £1,476.

£435 million to support businesses affected by the business rates relief revaluation

The revaluation of business rates will improve fairness by making sure bills reflect today’s rents and three out of four businesses will see their rates go down or stay the same.

Those coming out of Small Business Rates Relief will have their bill increase capped at £600. Funding will enable Local authorities to provide £300 million of discretionary relief to help businesses most affected by the revaluation.

And from 1 April 2017, pubs with a rateable value up to £100,000 will be able to claim a £1,000 business rates discount for one year.

Rural Rate Relief will increase to 100%

To support businesses critical to rural communities, Rural Rate Relief will increase from 50 to 100% in April 2017, saving a business up to £2,900 a year.

The relief is available to businesses in rural areas with a population under 3,000, where that business is:

  • the only village shop or post office with a rateable value of up to £8,500, or
  • the only public house or petrol station with a rateable value of up to £12,500

Fuel duty will remain frozen for a seventh year

This will provide certainty for businesses and help boost economic growth. A small business with a van can expect to save £350.

New corporation tax relief for museums and galleries

This will encourage museums and galleries to develop creative exhibitions and to display their collections to a wider audience. The rates of relief will be set at 20% for non-touring exhibitions and 25% for touring exhibitions.

The relief will be capped at £500,000 of qualifying expenditure per exhibition.

Social Investment Tax Relief limit will increase

The Social Investment Tax Relief limit will increase to £1.5 million for social enterprises aged up to 7 years, from 6 April 2017. This will encourage individuals to support social enterprises and help ensure they have access to new sources of finance.

Published 1 April 2017