A total of £435m (€500m) has been allocated to help some businesses weather the impact of rising business rates, as revealed in the spring budget by the chancellor, Phillip Hammond, yesterday.
The funding will come in the form of £300m for local authorities for ‘discretionary relief’, and a £1,000 business rate discount for pubs with rateable values up to £100,000.
Carl D’Ammassa, group managing director – business finance at Aldermore, said: “We welcome the government’s announcement of £435m in further support for businesses facing significant increases in bills from the English business rates system. This will go some way to allaying the anxieties of those most impacted.”
Lease taxation will remain largely the same, but will change slightly to reflect the new international lease accounting standards.
Simon Goldie, head of asset finance at the Finance and Leasing Association (FLA), said: “The FLA has confirmed with HMRC that this would be a variant of ‘option one’ in the consultation paper they published last year on lease taxation and would therefore maintain capital allowances for the lessor.”
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The fleet sector was also affected, as upcoming rises in vehicle excise duty (VED) were not reversed, and the implementation of lower rates for ultra-low emission vehicle (ULEVs) benefits-in-kind taxation remained delayed until 2020.
Matt Sutherland, chief operating officer of Alphabet, said that since the autumn statement there had been a lack of clarity from government, but expressed fears that VED and delayed lower rates for ULEVs would “provide a disincentive for the take up of ULEVs.”
Sutherland said: “Hopefully the publication of the Finance Bill on 20 March will bring more clarity on outstanding technical questions raised since autumn.”
Gerry Keaney, chief executive of BVRLA, also expressed disappointment at these measures, and predicted a fall in purchases for the fleet sector as a result of the rise in VED.
He said: “Car rental companies operate the newest fleet on UK roads, and the average rental car is just eight months old. The sector purchases around 324,000 cars each year, but this number is now likely to fall as our members lengthen their operating cycles.”