A welcome announcement was made in the recent Budget, a promise to cut business rates for smaller companies. Due to come into place in April 2017, businesses who occupy a single property with a rateable value of £12,000 or less will pay no business rates. Those no longer expected to pay rates are expected to be up to £5,900 better off, freeing up funds that companies can then invest into growing their business.
At the moment, only businesses with a rateable value of £6,000 are exempt from rates, meaning that another 600,000 businesses will benefit from this change. It is estimated that a further 
250,000 will also be paying less in business rates.
Chief Executive of CVS Business Rates, Mark Rigby says that changes are largely positive for businesses. ‘For many small firms, it will mean smaller overheads, less administration and an overall cost saving of as much as £5,900 in some cases.
‘This is money that could be reinvested back into the business for better marketing, trialling a new product, or increasing staff hours, for example.’
The Association of Convenience Stores (ACS) also found the changes to be positive. Chief Executive of the ACS, James Lowman said ‘the increased small business rate relief threshold will be a welcome measure for thousands of local shops who are facing rising costs in other areas of their business.’
In a further effort to boost Britain’s businesses and to encourage foreign investment, corporation tax is also due to be cut again, coming down from 20% to 17%. This is expected to benefit over 1 million businesses.
Business in the dark over changes
Despite what most people see as welcome changes to the business world, a survey by CVS found that 36%, over a third of business owners are unaware of the changes made by the government.
A survey found that of those who are aware of the changes, 3 in 10 small business owners say that this is not enough to revitalise businesses and the high street.
The changes will start from 2017 because that’s when the scheduled business rates revaluation will be taking place. This is how commercial property’s rental value is assessed by the Valuation Office Agency. This assessment is then used to work out the rates that a business owes. Draft values are due to be published in October this year, giving businesses time to adjust before the new tax year.
Mark Rigby said, ‘when the next revaluation comes into force, some businesses will move outside of the £12,000 threshold for rates relief, and some will fall within it. This largely depends on the specific nature of your property and where in the country it is located.’
He also said that due to the vast amount of properties due to be assessed, mistakes are bound to be made. In such cases, businesses can challenge their proposed rates. However, you will only have one opportunity to do so and he advises businesses to consult legal advice before formally challenging the rates.
The fact that many business owners are unaware of these changes could lead to potential problems in the future. Businesses need to be aware of any potential reliefs they might benefit from so that they can include this in their business and financial plans for the next tax year. They also need to know about the procedures and steps to take in the event of a mistake.