Spring Budget Shock: Business Rates Soar Despite NI Tax Cut
Business leaders across the UK have been biting their nails over the Chancellor’s spring budget. At the heart of their worries? Business rates. Several major trade bodies begged the Chancellor to peg the standard multiplier to a predicted 2% inflation rate — not the inflated September 2023 figure.
Business Rates Set to Jump 6.7% from April
Despite prior announcements, the Chancellor has stuck to a 6.7% hike in business rates for commercial properties with rateable values over £51,000 starting April 1. That aligns with last September’s inflation rate — more than triple the expected 2% CPI inflation for Q2 2024. The outcry is loud and clear: businesses feel the squeeze.
Tax Cuts Won’t Offset Rising Costs for Businesses
Earlier tax cuts in January were a nod to voters ahead of the looming General Election. Experts expected a 1% tax cut costing about £4.5 billion, but the Chancellor went bigger — a 2% NI tax cut, which will cost roughly £10 billion. While this eases the tax load on both workers and employers, the hefty 6.7% business rates hike effectively cancels out any benefit for companies.
RVA Surveyors warns: “Using the 6.7% inflation rate adds over £1.5 billion to business rates, severely burdening UK firms.”
Mixed Reactions as Businesses Face a Financial Tug of War
The spring budget has split opinion sharply. Individuals cheer tax relief, but many businesses are left feeling hammered by soaring rates. The Chancellor’s balancing act seems to favour voters, leaving companies to swallow the rising costs. Only time will tell how this plays out for the UK economy.
