George Osborne Announces Cap on Business Rate Rises

During today’s autumn statement, Conservative Chancellor of the Exchequer George Osborne announced increases in business rates in England are to be capped at 2%, instead of being linked to inflation.

Business rates were set to rise by 3.2% next year, based on September’s Retail Prices Index measure of inflation.  Mr Osborne said he planned to encourage small businesses on to High Streets by cutting £1,000 from their rates bill.

Firms will also be allowed to pay their rates in monthly instalments.  The chancellor said the cap could save businesses up to £3,375.

The £1,000 discount will apply to retail premises, including pubs, cafes and restaurants, with a rateable value of up to £50,000 for two years.  He also pledged help for the High Street by introducing a “reoccupation relief” – halving business rates for businesses moving into vacant premises.

In a separate move, the chancellor announced he would abolish employer National Insurance contributions for the under-21s from April 2015, with the exception of those earning more than £42,285.

Mr Osborne also promised to look at reforming the business rate system for 2017, a move many business lobby groups, including the BRC, have been calling for.