Business rates reform pledged by political parties
1st May 2015
As the 2015 general election campaign kicks into high gear, party leaders are urgently trying to secure the small business vote.
Business rates have become one of the notable issues affecting SMEs and many parties have pledged to support small businesses by reforming the current system.
The coalition government has made several changes to the system over the past 5 years:
- the business rates discount was increased to £1,500
- the 100% Small Business Rate Relief was extended
- rate rises have been capped.
Four of the main parties have included specific measures on business rates in their manifestos:
The Conservatives are committed to conducting a review into the business rates system. Announced at Budget 2015, the review will examine the current structure of the rates system with a view to modernise how the system reflects changing property values.
According to their manifesto, it will result in a system that:
"properly reflects the structure of our modern economy and provides clearer billing, better information sharing and a more efficient appeal system".
The government will report on its findings at Budget 2016 with the aim of introducing changes in 2017.
Labour has promised to cut and freeze business rates during the next Parliament. According to their manifesto, this will help more than 1.5 million small businesses.
They have also pledged to maintain business rate relief for private schools on the condition they develop "meaningful" relationships with state schools.
UK Independence Party (UKIP)
A UKIP government would change the Small Business Rate Relief in order to lower "prohibitively high" business rates.
Under their plans:
- businesses with one property valued at less than £50,000 would get a 20% rate relief
- this would apply to businesses with more than one property as long as the combined value does not exceed £50,000.
Their manifesto claims this change would apply to almost 90% of all business properties in the UK.
Scottish National Party (SNP)
The SNP has promised a package of rate reliefs worth around £618 million in 2015/16 which they say will support 100,000 Scottish businesses.
They will also continue the Small Business Bonus Scheme which reduces or removes rates for thousands of businesses.
Phil Orford MBE, chief executive of the Forum of Private Business, said:
"It is encouraging to see that the role played by SMEs is recognised, and the across-the-board commitment to crucial policies such as investment in rural broadband, support for apprenticeships and the review of business rates."
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