Communities Secretary Sajid Javid has confirmed the Budget will feature some form of help for small businesses that will be hard hit by the business rate rises.
It came just hours after Prime Minister Theresa May had ordered Javid and Chancellor Philip Hammond to ensure there was “appropriate relief” for the most vulnerable firms when the business rates reforms come into effect on April 1.
However, there was no immediate indication of what form the additional support will take when the Budget is released on March 8.
“It is clear to me that more needs to be done to level the playing field to make the system fairer,” Javid told Westminster Hall yesterday.
“I am working closely with the Chancellor to determine how best to provide further support to businesses facing the steepest increases.
“We expect to be in a position to make an announcement at the time of the Budget.”
His announcement – which came two days before business bills for the coming year are due to start being sent out – is a change of tone from his previous comments in which he accused business rates critics for leading a campaign of “half truths” and “scaremongering”.
Nonetheless, Javid‘s announcement was welcomed by rent and rates specialists CVS.
“Even at the 11th hour, short term, I am confident that with some form of targeted relief, the financial burden can be eased for those most affected, particularly small firms” chief executive Mark Rigby said.
“Longer term, given the issues highlighted by my firm with the tax reductions on the Amazon distribution centres and the dismay and perturbation that has ensued, meaningful discussions must be had around the tax system to ensure that it is fit for purpose for the 21st century economy.”
May told Westminster Hall yesterday that “appropriate relief” would be made available to businesses that are “particularly adversely” affected by the business rates reforms.
The news follows growing discontent from a growing number of MPs from all parties over the impact the rates changes will have on many struggling businesses, especially high street retailers.
The government has already established a £3.6 billion transitional fund to help businesses facing sharp increases when the property-based levy is updated for the first time since 2010.
Labour has said that more money was needed, accusing the government of consistently favouring large businesses over smaller companies in its tax reforms.
Business organisations have warned that the latest revaluation imposes stiff increases on some traditional high-street shops, while out-of-town warehouses run by internet giants escape more lightly.
However, ministers – led by Javid and Treasury Chief Secretary David Gauke, insist that almost three-quarters of firms will see rates decrease or stay the same, while 600,000 of the smallest businesses will be taken out of the tax altogether.
The business rates controversy has dominated headlines in the past few days, with several high-profile business and retail groups, influential figures such as Mary Portas and London Mayor Sadiq Khan, as well as Sansbury‘s chief executive Mike Coupe all weighing in on the debate.