Autumn Statement 2013: Govt gets behind small business
The Chancellor is to give small companies that own premises worth up to only £50,000 a £1,000 discount on their business rates.
They will also be allowed to pay their rates in 12 monthly installments, which will aid cash flow.
Osborne also confirmed rises in business rates will be limited to 2%, instead of the 3.2% they were due to go up by.
The Chancellor also said the small business rate relief scheme will be extended beyond 2014 and fuel duty will be frozen at 57.95 pence per litre.
The Federation of Small Businesses (FSB) has welcomed the changes.
John Allan, the FSB’s national chairman, said: “Action on business rates was the top priority for our members, and the Chancellor has addressed some of their concerns in the Autumn Statement. Too many businesses suffer from yearly price rises so capping business rates increases is a welcome measure.
He added: “Relaxing business rates for those firms that want to expand and incentivising new businesses into empty properties on the high street will boost retail and town centres. Retailers on struggling high streets will be especially heartened by the additional £1,000 relief.”
Adam Tyler, CEO of the National Association of Commercial Finance Brokers (NACFB), said: “Extending business rate relief and capping inflation on commercial premises will help hold back the rising tide of business costs.
"The antiquated system used to work out business rates based on the Retail Price Index desperately needs an overhaul, as the costs have spiralled high enough to threaten the survival of many fledgling SMEs. Extending the relief will buy the time to do this.
“Cutting business tax bills will also give British entrepreneurs much needed breathing space and free up further cash for investment. Prioritising smaller businesses is a wise move: they are fundamental to creating jobs, increasing output and lifting the wider economy to greater heights.
An increase in the general level of prices that persists over a period of time. The inflation rate is a measure of the average change over a period, usually 12 months. If inflation is up 4%, this means the price of products and services is 4% higher than a year earlier, requiring we spend and extra 4% to buy the same things we bought 12 months ago and that any savings and investments must generate 4% (after any taxes) to keep pace with inflation. Since 2003, the Bank of England has used the consumer prices index (CPI) as its official measure of inflation (see also retail prices index).