Osborne’s small business rates relief branded “insufficient”
The business rate relief for small and start-up enterprises announced in this year’s Autumn Statement, has been branded “insufficient.”
The relief is an attempt to encourage growth in commercial property and retail industries, which has so far been stagnant in 2012.
The rate, which accounts for 5% of Britain’s annual tax bill, was set to rise in line with inflation in 2013 – up to 2% - but was scrapped following pressure from leading business heads to cut rates.
The increase would have seen retailers pay an extra £175m in business rates per year.
There were calls for George Osborne to abandon the postponement of a property revaluation for another five years; meaning business rates of today are still based on the peak rates of 2008.
This was quashed by Mr Osborne who instead offered rate relief to newly built commercial property for 18 months after its completion, in a move aimed at encouraging property development within the UK.
The relief is set to run from October 2013 to September 2016 and cost the government an estimated £150m.
Rates relief for small businesses was also extended until April 2014, giving 350,000 businesses rate free accommodation for a whole year.
Stephen Robertson, director-general of the British Retail Consortium predicts that these measures will fail to support already struggling high streets.
“The Chancellor’s failure to offer immediate support for struggling high streets by announcing a business rates freeze is disappointing”, he said.
“Giving a grace period to new-build premises should encourage speculative investment but, with one in nine shops already standing empty, more help to keep high street businesses trading in them would have been better.”
Mr Osborne also unveiled plans to invest £50m in East London’s technological development as reported by SOS, in a move which is set to put Britain on a global scale with leading technological innovators.