2016 Budget

The Chancellor has announced changes to business rates in his 2016 Budget.

Raising the threshold under which small businesses pay no rates from £6,000 to £12,000 will, according to the Government’s figures, increase the number of small businesses who do not pay rates from a third of a million to 600,000. It should be noted that the higher levels do not come into effect until April 2017 by which time the rating revaluation will have changed many rateable values.

The government will aim to have revaluation every three years in future although the wording of the announcement makes it clear that this is not set in stone and could presumably change if a revaluation clashes with a general election causes instability for ratepayers.

A move to link business rates inflation from RPI to CPI will reduce the effect of inflation each year.

The small business threshold will be raised from £18,000 (£25,500 in London) to £51,000. This will mean that around 250,000 properties will save 1.3p per £1 of RV. The big saving will be in transitional relief on those properties assuming that there will still be a transitional scheme with three yearly revaluations.

There will be a move to standardise rate demands. This will be very welcome news to anybody who has properties in more than one billing authority’s area as finding the relevant information on different bills can be a challenge.