Thousands of UK independent businesses will save up to £25,000 by removing business rates in 2020. Chancellor Rishi Sunak claims companies with a rateable value of less than £51,000 will be eligible for the tax holiday, which applies to independent shops, cinemas, restaurants in South London.
This procedure has come from the need to support these businesses when faced with the distruption the coronavirus has caused. Business rates are simply a tax on properties used for commercial purposes. They are charged this rate based on an estimate of the cost to rent the property on the open market, hence the ‘rateable value’.
Lumberjack Coffee
Sunak has claimed the elimination of these business rates will aid museums, art galleries, theatres, sports clubs and night clubs; all those small businesses that would have been deeply affected by the coronavirus outbreak.
Despite these measures being taken because of the virus, the chancellor has said the business rates system in general will undergo review, with conclusions published in autumn. This could be off the back of several firms in England appealing for the system to be revised, arguing it makes it hard for bricks and mortor retailers to compete with online businesses.
“This will definitely help the cause and hopefully see many ...[small businesses]... come out the other side ready to benefit from the increased spending power prompted by the money people are currently saving on their discretionary spend.”
It seems this will mainly be supporting very small businesses, as larger retail chains are unlikely to benefit with a cap on the amount of tax relief a business can claim over 3 years. Many larger businesses have already exceeded this cap.
Other benefits small businesses could recieve due to this change include:
Cash grands of £3,000 to very small businesses with rateable values less than £15,000
Government backing for banks to offer loans of up to £1.2m to small and medium-sized businesses
Businesses with less than 250 employees can reclaim the cost of providing Statutory Sick Pay (SSP) to employees who have to be quarentined due to the virus
A new helpline for businesses and self-employed individuals to arrange to defer tax payments
“We’re a small and independent business that has community at the heart of what we do. Ultimately we’re in favour of any initiative which creates an even playing field in what is a challenging business climate, and so we’re thankful for the relief. The break on rates benefits not only us and our ability to continue serving fresh coffee to our community but also other small businesses similar to us.”
This clearly shows the continued support and respect governing bodies have for small, independent businesses, with changes like these benefitting them and seeing that, even in the wake of a crisis, the UK’s small businesses will still stand.
We would love to know our followers’ thoughts on this change and we hope to see many small businesses who have struggled during the cornavirus outbreak get back on their feet and thrive once again!
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