Knight Frank – Budget Comment – Business Rates

Keith Cooney, National Head of Business Rates Service commented:

‘The Chancellor said “ there will be no short term giveaways “  and he kept his word with the heavy burden of business rates set to continue. The much applauded review of the system is not set to change this burden which will rise by £ 700 million to £ 28 billion this year. It is telling that in the Treasury papers released, that this is planned to rise to £ 32 billion irrespective of the 2017 Rating Revaluation. To place this is context it will surpass the total amount collected in Council Tax in 2016 for the first time ever. This means 33 million combined households are paying less than the 1.8 million rated properties.

The Chancellor has continued to create yet more reliefs with the latest been for shared workspaces and marker spaces. He is also seeking to help local newspapers through the business rates system. However, the reality is that he is offering no new funding to Local Authorities for these measures. The same Local Authorities who have had their budgets cut and are continuing to exercise their discretionary powers by refusing reliefs to businesses on an increasing basis. The total amount of discretionary relief granted has already fallen by 33% in one year with only £ 200 million granted last year.

It is hoped that this trend does not continue, otherwise the pilot schemes launched in Greater Manchester and Cheshire where Authorities are able to retain 100% of business rates will not support business growth. “

Other Business Rates Measures
·         Expansion of Enterprise Zones in Mersey Waters, MIRA, Humber, Manchester, Tees Valley ( Pairie) and Oxford Science Vale.
·         Designation changed for two sites at Leeds Enterprise Zone to include Enhanced Capital Allowances
·         Creation of New Enterprise Zones at Blackpool and Plymouth