Nearly two thirds (64 per cent) of owner-managed businesses will not benefit from reforms to business rates, a study shows.
According to the latest Owner Managed Business (OMB) Barometer from Bank of Cyprus UK, a quarter (25 per cent) of OMBs see the reforms as reducing costs but not by enough to benefit their business.
Just one in seven (14 per cent) OMBs will benefit from the reform to business rates through reductions in costs, which they say will make their business more competitive.
Previous research from Bank of Cyprus UK in July 2015 showed that a third (33 per cent) of OMBs wanted the government to permanently double rate relief for small businesses.
In March’s Budget, Chancellor George Osborne announced a reform of business rates meaning that from April 2017 businesses whose properties have a rateable value of up to £12,000 will not have to pay business rates at all, a rise from £6,000 previously.
In addition, properties with a rateable value between £12,000 and £15,000 will receive tapered relief.
Despite this, two in five (40 per cent) OMBs say they will not qualify for the reforms, and will therefore be excluded from any cost savings intended by the measure.
Lakis Kasapis, head of banking at Bank of Cyprus UK says that while it was encouraging to see the Chancellor supporting small businesses by permanently doubling rate relief, it is clear that these reforms are not benefitting OMBs as much as owners might have hoped.
‘These are Britain’s independent high-street retailers, family businesses and shopkeepers,’ he says.
‘With further reforms in the pipeline for 2020, including the frequency of revaluation changing to every five years and the Consumer Price Index rather than the Retail Price Index being used to measure inflation, OMBs need to stay informed about measures which may affect business rates and plan ahead to ensure their business bottom line is not affected negatively.’
Further reading on business rates
See also: Law reform boost for small business