Chancellor scraps business rates for small firms

The measure, announced in the first budget since October 2018, will see a 100 per cent retail discount apply to all business properties.

“Our manifesto promised that for shops, cinemas, restaurants and music venues with a rateable value of less than £51,000 we would increase their business rates retail discount to 50 per cent,” said Prime Minister Boris Johnson’s new Chancellor, Rishi Sunak.

“Today I can go further and take the exceptional step for this coming year of abolishing their business rates altogether.”

Mr Sunak also scrapped the tax for 2020-21 for tens of thousands of other businesses in the leisure and hospitality sectors, previously not covered by the policy, including museums, art galleries and theatres; caravan parks and gyms; small hotels; sports clubs; night clubs; club houses and guest houses.

“That is a tax cut worth over £1 billion, saving each business up to £25,000,” he added.

“And it means, over the next 12 months, nearly half of all business properties in England will not pay a penny of business rates.”

Moreover, he announced the launch of a fundamental review, to be concluded at the autumn budget, into the long-term future of business rates.

Business rates in Scotland, Wales and Northern Ireland are set by the devolved administrations. 

Going a step further, Mr Sunak announced a £3,000 cash grant per business to any business currently eligible for the small business rates relief.

This, he explained, is a £2 billion cash injection direct to 700,000 of the UK’s smallest businesses.

"If further action is needed as the situation evolves – I hope the whole House knows, I will not hesitate to act," the Chancellor said.