One of the key announcements from Budget 2010 was in a ‘freeze’ in business rates for some small companies from October 2010 – so which businesses will benefit, and by how much?
Under the Chancellor’s plans, any businesses with a rateable value of up to £6,000 p.a. will not have to pay any rates at all for 12 months. Partial rates relief will be available for business premises with rateable values up to £12,000.
In effect, business rates will fall from 48.5p in the pound, to 41.4p for the year starting October 2010.
According to Treasury figures, around 345,000 small businesses would benefit from this concession – this number includes 100,000 shops, 90,000 industrial businesses and around 60,000 offices.
However, how generous a cut is this really? According to AccountingAge, business rates relief will amount to £400m over the next two years.
In terms of the other business measures announced in the Budget, the changes to entrepreneurs’ relief will cost the Exchequer just £5m next year and £75m the year after; while the investment allowance will cost £260m in total by 2012/2013.
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