The Chancellor’s first, and last, Spring Budget (from now on the Budget will be presented in the autumn) has focused on boosting productivity, upskilling and building up a Brexit safety fund to get the country “back to living within its means”. As Government announces further details on each we will keep you updated. If you have any questions please contact Vernon Hunte, Government Affairs Director.
Business Rates – Immediate measures with fundamental reform on the horizon
The Chancellor announced three measures for England to help businesses in the short term: any business losing small business rates relief will see any increases capped at £50 per month for 2017 and subsequent increases will either be capped at the greater of £50 per month or transitional relief rate; local pubs whose RV is up to £100,000 can apply for a £1000 discount in 2017; and provide local authorities with £300 million fund to provide discretionary relief in their local areas. Ufi Ibrahim called these measures a “drop in the ocean” in terms of helping hospitality and tourism businesses deal with the increase, and highlighted that the Government is already struggling with a 250,000 backlog of outstanding Business Rate appeals.
Over the longer-term the Chancellor committed to reforming the revaluation process to provide for revaluations at least every 3 years to avoid dramatic increases and to target those businesses, especially large digital companies, which don’t have a large ‘bricks and mortar’ presence to pay their fair share. The government will set out its preferred approach in due course and will consult before the next revaluation in 2022 and the BHA will lead in representing the industry interest in that discussion.
Government to consult on existing tax relief given to short-term (‘sharing economy’) tenancies
In the Budget document, made a small but interesting reference to consult on proposals to redesign rent-a-room relief to ensure it is better targeted to support longer-term lettings. Further details are awaited but, following campaigning by the BHA, this could help ensure rent-a-room reliefs benefits landlords with long-term tenants. The BHA sees this as an opportunity to correct a tax relief policy announced by the previous Chancellor which benefits large asset owners, rather than ordinary working families.
In other measures the Chancellor announced:
- Investment in technical skills
As trailed before Budget the Chancellor announced a £500 million injection for T-Levels with the aim of placing technical qualifications on a par with academic results.
- Air Passenger Duty to increase with RPI
APD rates for 2018-19 will be uprated in line with RPI. To provide ‘good notice’ for the airline industry, rates for 2019-20 will be set at Autumn Budget 2017.
- Broadband and transport links
- Starting this year the government will invest £200 million to fund a programme of local projects to test ways to accelerate market delivery of new full-fibre broadband networks.
- £220 million fund was announced to address pinch-points on the national road network.
- £690 million ‘competition’ for local authorities across England to tackle urban congestion and get local transport networks moving again.
- VAT Thresholds
From 1 April 2017 the VAT registration threshold will increase from £83,000 to £85,000 and the deregistration threshold from £81,000 to £83,000