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Budget 2017: Pubs see extra help in business rates revamp Budget 2017: Pubs see extra help in business rates revamp
(about 1 hour later)
Pubs and small businesses will receive extra help with their business rates bill, the chancellor has announced.Pubs and small businesses will receive extra help with their business rates bill, the chancellor has announced.
Every pub with a rateable value of less than £100,000 will receive a discount of £1,000 in 2017, a move that affects 90% of all pubs, Philip Hammond said. The new measures mean that 90% of pubs in England will receive a discount of £1,000 in 2017, Chancellor Philip Hammond said.
Small businesses set to lose their rate relief in the planned revamp will see increases capped at £50 a month.Small businesses set to lose their rate relief in the planned revamp will see increases capped at £50 a month.
A £300m fund for local councils to offer discretionary relief to the worst-hit firms was also announced, A £300m fund for local councils to offer discretionary relief to the worst-hit firms was also announced.
Overall, the extra relief will cost the government £435m, the chancellor said.Overall, the extra relief will cost the government £435m, the chancellor said.
Ahead of the Budget, business had been lobbying hard over the issue. An update to business rates comes into effect in April and many firms - pubs and restaurants in particular - had complained that the sharp increases threatened their survival.Ahead of the Budget, business had been lobbying hard over the issue. An update to business rates comes into effect in April and many firms - pubs and restaurants in particular - had complained that the sharp increases threatened their survival.
One retail body welcomed the move. Business rates are based on a what is known as the "rateable value" of its property - that is a calculation based on the rental value of the space. For pubs, the latest measure applies to those with a "rateable value" of £1,000.
"This much-needed government support will save the sector over £24m and will help safeguard investment and jobs," said Kate Nicholls, chief executive of the Association of Licensed Multiple Retailers, a body representing retailers in the eating and drinking sector. The Association of Licensed Multiple Retailers, a body representing retailers in the eating and drinking sector, welcomed the move saying it would "safeguard investment and jobs".
But other business bodies were more lukewarm towards the move.
"Measures that mitigate the short-term impact of business rate rises are little more than a sticking plaster," said the British Chambers of Commerce. "The radical changes needed to improve the broken business rates system will have to wait for another day."
Mike Cherry, chairman of the Federation of Small Businesses said the "new money is a direct and much-needed response to those facing astronomical hikes in their business rates".
But he added that the tax remained out-of-date and called for the creation of a simpler, fairer system.
How are business rates calculated?How are business rates calculated?
Rates are calculated by multiplying the rateable value of a property by a multiplier set by the government. But as property values change over time, rateable values need to be reassessed periodically - usually every five years. Business rates are in effect the commercial version of council tax, and are paid on the rental value of the space that businesses occupy. The amount depends of the size of the property and what it's used for.
However, this update to property values is two years behind schedule, making it a harder pill to swallow in areas where the price of real estate has been rising. This update to property values is two years behind schedule, making it a harder pill to swallow in areas where the price of real estate has been rising.