Pubs, shops and restaurants will get a third off business rates for the next two years, the Chancellor announced, in a Budget measure set to boost Sheffield’s independents.
Businesses with a rateable value of £51,000 or less will benefit from the cut, worth up to £8,000 for 90 per cent of businesses, he said. It will bridge the gap until 2021 when rateable values will change, he added.
Simon Buchan, head of VAT Services at Sheffield accountants BHP, said: “The announcement provides a welcome boost to the high street. However, unless local authorities are compensated by central government for this loss of revenue the announcement represents a further cut to their funding. It will be interesting to see what the Chancellor has up his sleeve to make up for this.”
Mr Hammond also announced a £675m Future High Streets Fund to support councils to transform high streets, and announced an increase in the Transforming Cities Fund, which aims to improve public and sustainable transport, from £1.7bn to £2.4bn.
The handful of devolved areas with a metro mayor have already received £840 million, but Sheffield City Region is in competition with the rest of England for a share because its devolution deal has stalled.
A rival bid for ‘One Yorkshire’ devolution did not get a mention, indicating the county would continue to miss out.
Mr Hammond also said he would increase the annual investment allowance from £200,000 to £1m for two years, supporting investment by smaller companies, and extend UK Export Finance’s direct lending scheme by £2 billion in the next two years.
Meanwhile, the Sheffield-based British Business Bank would be able make £200m of additional investment if there is ‘no future relationship’ with the European Investment Bank Group after Brexit, he said.
He also announced £37m for Northern Powerhouse Rail.
James Sutton, of SME accountants, Haines Watts, said: “Extending start-up loan funding to 2021 and extending the minimum qualifying period for entrepreneur’s relief from 12 months to two years will provide a welcome boost.
“From October 2018, businesses can deduct two per cent of the cost of any new non-residential structures from profits before they pay tax. Some £1bn of business bank guarantees to revive SME house builders, coupled with £675m of co-funding could also help local high streets.”