Businesses benefit from business rate discounts
Businesses across the country are benefitting from record levels of discounts from their rates bills.
Businesses across the country are benefitting from record levels of discounts from their rates bills, new figures show today (19 November 2015) – with many small businesses paying no rates at all.
Latest figures show that in the last year, councils have paid out over £3 billion in business rate discounts and reliefs for local companies – a £221 million increase on the previous year.
This means the total amount of business rates actually paid by businesses has gone up by less than 1% in the last year – less than half the rate of inflation.
Communities Secretary Greg Clark said:
I’m pleased to see councils are taking steps to offer the support businesses need to grow and flourish, with over £3 billion paid out in business rate relief in the last year.
The power to give business rate discounts was brought in with the Localism Act and in future all business rate revenue will be in the hands of local councils.
They will have even greater ability to give to help local businesses in their area.
Reforming business rates
Supporting businesses to grow and prosper is an important part of the government’s long-term economic plan.
That’s why the government has offered a comprehensive package of business rates reliefs, including:
- small business rate relief totalling over £1 billion
- extending the extra small business rate relief scheme which means 400,000 small businesses pay no rates at all
- a new £1,500 discount to local shops
On top of this the government has announced plans for councils to retain 100% of local taxes – including all revenue from business rates – to spend on local government services.
This will mean councils will retain all revenue from business rates for the first time since 1990.
It also builds on reforms in 2013 which enabled councils to retain 50% of the proceeds of rates, to ensure that when local areas take steps to boost business growth in their area they see the benefit.
The reforms also include plans to abolish the uniform business rate, giving local authorities the power to cut business rates to boost enterprise and economic activity in their areas – meaning local areas that successfully promote growth and attract businesses will keep all the benefit from increased business rate revenues.
And for those areas that choose to have city-wide elected mayors, there will be even greater flexibilities - including the power to increase rates for spending on local infrastructure projects, as long as they win the support of local businesses.
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