The Chancellor has just finished delivering his March Budget 2016 and no doubt many smaller retailers will welcome the news that business rates have been revised in a move that is predicted to lift 600,000 businesses out of paying the rates. But, according to one expert, it appears that many smaller retailers are not out of the woods yet.
The Chancellor announced measures that will increase the rateable threshold for small businesses to £15,000 from the previous £6,000. It is believed that more than 6,000 small businesses will not pay any rates at all – and for retailers this is bound to be very welcome news. He also announced that business rates will be measure against CPI, not RPI as they previously stood.
However, according to Phil Mullis, partner and head of retail and wholesale at top-20 UK accountancy firm, Wilkins Kennedy, the reduced rates may mean increased profits, which are subject to 20% corporation tax. Therefore, smaller retailers need to be on their guard if they are to take advantage of the new business rate reforms.
“Retail is all about consumption, so it relies on growth in order to really thrive” Phil Mullis commented. “If consumers are feeling confident and they have a little extra spend in their pockets, then retailers will see the main benefits from that.
“The new business rates reform is very welcome news, but, as usual, the devil is in the detail. It will be interesting to see the long term effects from the changes and how smaller businesses will benefit.”