Chancellor Sajid Javid has announced that as many as 18,000 pubs across the UK could see their business rates slashed following lobbying to ease the significant burden that the taxes impose.
According to the Chancellor, pubs with a rateable value below £100,000 will be eligible for the rate reduction, which will begin in April and those with a rateable value below £51,000 will receive the cut on top of a one-third reduction they already receive to their rates bill.
In addition, thousands of other small businesses, including shops, cinemas, clubs and hairdressers are expected to be eligible for the wider rates reduction, which form part of a £280 million package to revive “overlooked and left behind” towns.
However, there was less good news following analysis that suggests that the current business rates system pits local authorities against businesses after it was revealed that empty businesses cost taxpayers £1 billion a year.
Recent research found that some councils lose out on millions of pounds of potential business rates income through tax relief on empty properties, prompting calls for an urgent review of the system.
As one commentator remarked, there is a “perverse situation” where local government needs tax to go up while the business community is lobbying very hard for it to go down.
In response, a spokesman for the Treasury said that empty property relief strikes a balance between incentivising property owners to put vacant properties to use, while not penalising those who lose a tenant at short notice. He added that the system had been designed to redistribute rates income according to the needs of local areas.