Chancellor set to make speech on regulating business rates

The BBC has learned that the chancellor will make a statement on Thursday in an effort to boost small and large businesses through regulating the business rates to stop further increases. The announcement will put a cap on increases in rates to fix them at 2% next year within England and Wales unlike having them change with changing inflation.

George Osborne is also expected to announce the extension of the scheme that provides relief for small businesses. According to Hugh Pym who is a BBC correspondent, the newest development will however not be a full review of the entire system that many people consider outdated despite pressure from industry players and the Business Secretary.

Lost Revenue

Business rates were expected to increase by 3.2 next year to reflect the conventional retail prices index in September, which is a measure of inflation. However, business organizations and other industry players have been lobbying intensely to review this trend. The move to cap the business rates at 2% will see the loss of over £300m next year, Additionally, the chancellor will announce the extension of the scheme that offers relief to small businesses. The BBC chief economics correspondent, Hugh Pym said that the business rates have been crippling businesses over a long time making some of the High Streets to struggle with growth.

On the other hand, manufacturers who have been feeling the need to expand operations have had to struggle with this since the rates increase offset any investments made. Local councils within Scotland for instance have been given an option to adjust their business rates through relief packages that are tailored to meet the local needs thanks to the latest move by the Scottish government.