Business rates for the coming year will be abolished for small businesses, chancellor Rishi Sunak has revealed in his first budget.
Measures to alleviate the impact of the coronavirus dominated the budget, with Sunak taking the "exceptional step" to abolish business rates this year for firms with a rateable value below £51,000.
Over the next 12 months, nearly half of all business properties in England will not pay a penny of business rates, said Sunak. Businesses not currently eligible for rates relief will get a £3,000 one off grant.
The chancellor also promised a formal review of the business rates scheme this autumn.
Saying "there is likely to be a temporary disruption to our economy" as a result of the coronavirus outbreak, Sunak unveiled a series of fiscal stimulus measures valued at £30bn.
A new Coronavirus Business Interruption Loan Scheme that will see banks offer loans of up to £1.2m to support small and medium businesses was also announced as well as measures for the government to cover sick pay for small businesses hit by coronavirus. Statutory Sick Pay costs for businesses with fewer than 250 employees will be met by the government in full for up to 14 days per employee.
Corporation tax will not be cut this year, but will remain at 19%. Sunak said he expects the budget to "protect the vast majority of businesses through the worst of the crisis" as he promised to give the NHS "whatever extra resources" it needs to cope with the outbreak.
Today marks the first budget since prime minister Boris Johnson won a Parliamentary majority in December 2019 and came quickly for Sunak who only became chancellor last month after Sajid Javid resigned.
The Booksellers Association has long called for an overhaul of business rates, which has outgrown inflation and become a huge financial burden for small shops. Laura McCormack, the BA's head of policy and public affairs, has demanded immediate action, saying the current system is no longer fit for purpose and BA m.d. Meryl Halls urged the Treasury Select Committee's 2019 inquiry to "level the playing field" and reform business rates.
Reacting to today's Budget, Halls told The Bookseller: "We are pleased the government has announced short-term measures to help booksellers who will be impacted by coronavirus. The increase of the retail discount on business rates to 100% for 12 months will welcomed by many of our smaller members. We were also happy to learn that businesses not currently eligible for rates relief will get a £3,000 one off grant.
"It’s unfortunate that the full review of business rates isn’t happening until the autumn, but we’re reassured that the government remains committed to the review and we look forward in participating in dialogue with the Treasury when the time comes.
"We are disappointed however that corporation tax is remaining at 19%, whilst there have been no announcements made to ensure the playing field has been levelled between high street businesses and online retailers."
Today's Budget also saw Sunak abolish VAT on e-books, dubbed the “reading tax”. The government will introduce legislation to apply a zero rate of VAT to e-publications from 1st December 2020, which will make it clear that e-books, e-newspapers, e-magazines and academic e-journals are entitled to the same VAT treatment as their physical counterparts.
- Budget 2020: reading tax axed and business rates abolished for year
- Budget to include business rate relief package for small retailers
- Budget set to grant temporary business rates relief for high street
- Budget: business rate relief but industry hit by national insurance rise
- The British Book Awards 2020: Small Press of the Year