In the Budget today (March 11) it was announced that rates for businesses with a rateable value of less than £51,000 would be abolished for the coming year.
Sunak said: “In our manifesto last year, the government promised to increase their business rates retail discount by 50%, but we can go further. We are taking the exceptional step of abolishing business rates altogether.”
The announcement, for the current year only, will benefit dealers across the UK and in certain parts of London. However it is unlikely to impact those dealers with premises in expensive areas in central London. It is also temporary, for this current year, rather than a longer term fix.
Although the news is welcomed by the trade, a fundamental reform of business rates remains long-awaited. It had been promised for this Budget but has now been delayed until the Autumn Statement.
Prints dealer Nigel Talbot of Grosvenor Prints near Seven Dials in central London said the rates holiday will not make a difference to his rates bill and he is currently in dispute over his rating, with his case due to be heard at a tribunal.
He explained: “Many businesses have been given the wrong rateable value – our rateable value is 35% above our rent – so the announcement makes no difference to me and I consider myself a small business. The whole system needs reform.”
Christopher Battiscombe, director general of the Society of London Art Dealers (SLAD), said: “The Chancellor’s move is a step in the right direction and very much to be welcomed but will unfortunately help relatively few SLAD members. “Meanwhile I am seriously concerned about the potential impact of the coronavirus crisis on the finances of the UK art trade as a whole over the next few months and do hope that the Government will be thinking how to try to provide short term help.”
Freya Simms, CEO at trade association LAPADA, said: “Many of our members will be relieved by the immediate abolition of business rates. While this represents a short term plaster, we are encouraged to see the Chancellor commit to a full review of business rates in the autumn, something we have long campaigned for and which is long overdue.
“We are pleased to see decisive support in the face of the immediate CV-19 situation... Overall this was a pro-small business budget and, whilst entrepreneurs relief has been scaled back, the £1m lifetime limit will still enable thousands of small business owners to enjoy the fruits of their labour.”
Book and map dealer Tim Bryars of Bryars & Bryars in Cecil Court, central London, added: “I am delighted by the prospect of a tax holiday. I'm one of the lucky ones as my RV (Rateable Value) is below the £51,000 threshold.
“Business rates as a whole are due to be reviewed later in the year and that is what I am really waiting for. As a proportion of my rent, my business rates rose from 15% to 50% in roughly 10 years - at precisely the same time that customers found other ways to shop, especially online.
“Great though a tax holiday is, one less bill to pay, we are still going to need customers if we are to survive the year (some money coming in as well as some money not-going-out). Government decisions and advice will be crucial in the coming weeks. Advice to avoid crowds, avoid unnecessary travel, anything which feeds panic, will hit us hard.”
A number of measures were introduced to boost the economy including a £30bn pledged to help the economy respond to coronavirus, a package of £7bn to support the self-employed as well as an announcement by the Bank of England to reduce rates from 0.75% to 0.25%.