Alistair Darling’s last-minute decision to reduce the proposed rise in business rates will come as a relief to struggling firms. Business rates levied on 1.6 million properties across Britain were due to rise 5% last week. This is being limited to 2%, with employers able to spread the remaining 3% over the next two years.
“If ever there was a sign that this government has no idea what it is actually like to run a business, this 11th-hour debacle was it,” says Richard Tyler in The Daily Telegraph. A rise is still a rise, even if part of it is staggered. And it remains uncertain when the lower rate of tax falls due.
For now, businesses still have to pay the bill they were sent almost a month ago by their local councils. Small businesses will also bear the brunt of the abolition of business rate relief, which will cost around £100m. So it is likely to come as little comfort that the Department for Work and Pensions has just started handing out £2,500 to any business that will hire someone who has been unemployed for more than six months.