Response to Budget Announcement on Rates

The Chancellor has announced that he is extending the business rates holiday from October this year to April 2013.

The rates holiday first announced in the 2010 budget allows businesses with a rateable value of up to £6,000 a year will be exempt from paying any rates at all for 12 months, with partial relief for properties rated up to £12,000.

The Chancellor says that this will mean 500,000 rate payers or a third of all shops will have no business rates liability until April 2013.

Fiona Shorey, Head of Rating at dohertybaines said “Business rates are the third biggest cost for small businesses, after salaries and rents and while we are delighted to hear that the Chancellor is taking some steps to help small businesses he has made no announcement about any real help for medium sized firms who are really feeling the pinch during the current economic climate”.

The Chancellor also announced that he would be offering businesses the option to defer 60% of the increase in their rates bill next year. Fiona Shorey commented that it would be more helpful to revisit how the increases in rates are set. “A spike in inflation in September has led to a 5.6% increase in business rates across the board. A deferment of this increase is little more than covering over the cracks to the system. When this deferment was offered to businesses in 2008 many didn’t take up the option because it was seen to involve too much bureaucracy with little benefit”. 

For more information on your rates bill contact our business rates department.

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