The Budget 2016

On Wednesday 16 March 2016, the Chancellor of the Exchequer, George Osborne, presented his budget to the House of Commons. Inevitably this had implications on the UK tax payer and the Business Rates payer was not excluded from this with most notable changes for small business as follows:

From April 2017, small businesses that occupy property with a rateable value of £12,000 or less will pay no business rates.

Currently, this 100% relief is available if you’re a business that occupies a property (e.g. a shop or office) with a value of £6,000 or less.

There will be a tapered rate of relief on properties worth up to £15,000. This means that 600,000 businesses will pay no rates.

It should however be noted that this relief is only available to small business which only occupy one property i.e. a company with multiple properties with RVs less than £12,000 would not benefit from this.

In addition changes to Stamp duty for commercial property were announced, as follows – The way stamp duty on freehold commercial property and leasehold premium transactions is calculated will change. Currently, these rates apply to the whole transaction value. From 17 March 2016 the rates will apply to the value of the property over each tax band.

The new rates and tax bands will be 0% for the portion of the transaction value up to £150,000; 2% between £150,001 and £250,000, and 5% above £250,000.

Buyers of commercial property worth up to £1.05 million will pay less in stamp duty.

Stamp duty rates for leasehold rent transactions will also change, with a new 2% stamp duty rate on leases with a net present value over £5 million.