Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the adequacy of business rates and VAT for (a) micro businesses and (b) SMEs.
On business rates, the Government has announced a package of support worth £13.6 billion for businesses over the next five years. Together with the revaluation, this package ensures bills will more accurately reflect current market values whilst protecting businesses from large bill increases.
The Government's generous Small Business Rate Relief scheme sees over a third of properties (720,000) pay no business rates at all, with an additional 76,000 in the taper seeing their bills reduced. Combined with an updated Retail, Hospitality & Leisure (RHL) relief, 80% of RHL properties will see bills fall or stay the same at the 2023 Revaluation, protecting the UK's high street businesses.
The Government is also providing over £500 million of support over the next three years with a new Supporting Small Business scheme. This will cap bill increases to £50 per month (£600 per year) for businesses losing some or all of their Small Business or Rural Rate Relief due to the revaluation.
The Government recognises that accounting for VAT can be a burden on businesses. This is why, at £85,000, the UK has a higher VAT registration threshold than any EU Member State and the second highest in the OECD. This keeps the majority of UK businesses out of VAT altogether.
Although the Government keeps all taxes under review, there are no current plans to change the levels of VAT.