Expanding Small Business Rates Relief (SBBR) could encourage more small employers to grow and take on more staff.
Almost three in 10 (28%) employers said they would hire more employees if the threshold for SBRR was increased, and 26% would increase staff pay or benefits, according to research from the Federation of Small Businesses (FSB).
SBRR currently gives a 100% discount for properties in England with a rateable value of up to £12,000, with tapered relief up to £15,000. It has remained unchanged for almost 10 years.
FSB is calling on chancellor John Healey to announce in the Budget on 28 October an increase in the SBRR threshold to £25,000, which would remove at least 250,000 more small businesses from paying rates and give them room to grow.
Other Budget asks from the FSB include increasing the Employment Allowance, cutting Business Asset Disposal Relief to 14%, raising the VAT registration threshold to £100,000, removing 75% of renewables obligation costs from small business energy bills, introducing a Statutory Sick Pay rebate for small employers.
Tina McKenzie, FSB’s national chair, said:
“Small businesses across the UK are up against huge and persistent cost rises that are seeing so many struggle with running their business, let alone investing and expanding. This is the most important opportunity for the government to make its more pro-small business tone a reality.
“If we are to get the growth needed, the Budget must be a moment for some meaningful action, backing the small firms and self employed that are so crucial to the economy.
“We need a tax system that rewards ambition rather than punishes it. Widen Small Business Rate Relief so fewer firms are dragged into a punishing pre-profit tax, protect the Employment Allowance so hiring does not become steadily more expensive, reverse the damaging rise in Business Asset Disposal Relief and raise the VAT threshold so firms are not deliberately holding back turnover to avoid a cliff edge. These are practical changes that would give small businesses a reason to invest, hire and grow.
“This Budget will be an early test of whether the new government will put itself on the side of those who run a small business. Ministers say they want growth, but growth does not happen by squeezing margins, making employment more expensive and putting barriers in the way of expansion. If the chancellor wants to win back the confidence of entrepreneurs, he should start by making it worthwhile to take a risk again.”
