Business rate changes can positively impact thousands of companies
The government has paved the way for a set of radical business reforms that could see an overhaul of business rates and wide-scale infrastructure investment.
Communities secretary Eric Pickles will announce a £415million package of business rate cuts and investment, designed to boost high streets and local economies.
It includes plans for a £1,000 business rate discount for 300,000 small retailers, following up from the original announcement in the Autumn Statement.
Widespread help for retailers
However, many retailers still want to see more done to help them, especially given the high number of businesses that have entered company administration during the recession.
The tax on commercial property could be scrapped altogether, with retailers instead being charged a sales tax instead.
With the British Retail Consortium calling on accountants EY (formerly Ernst & Young) to come up with alternatives to business rates, their findings are due in the next month.
According to The Telegraph, the “government does not want to simply introduce a sales tax,” although the paper did suggest that taxing by property is no longer fit for purpose.
Currently, about £24 billion is raised a year via commercial property tax, so any alternatives would need to match this amount.
Changing for the better
But the big news for businesses is the potential savings that they could make, allowing them to pump funds into other aspects of their companies.
With the economic recovery being closely linked to SMEs, supporting these businesses could have additional consequences.
It could incentivise more companies to invest in property, strengthening the markets and providing more assets for businesses to work with.
The new measures could also help with the development of new university enterprise zones in some cities, helping to create and develop the workforce of tomorrow.
These young minds could be the difference between companies in the future struggling financially and being a success on a national or global scale.
By Phil Smith