Business rate holiday extended for SMEs
Nov 29 2011
The problem is – of course – primarily a lack of jobs. But it is made worse by a lack of skills.
Small businesses will be exempt from business rates for an extra six months after Chancellor George Osborne announced an extension of the holiday on the charge until April 2013.
The rate reprieve means small businesses won’t have to pay business rates for the entire 2011 and 2012 calendar years, while larger companies will be allowed to defer 60 per cent of the increase in their bills for two years.
The rate had already been extended to October next year, but the chancellor told Parliament today in his Autumn Statement that he wanted to do more for ‘existing small businesses who find the current economic conditions tough’.
‘Over half a million small firms – including one third of all shops – will have either reduced or no rate bills, for the whole of this year and for the whole of next financial year too,’ Osborne explains.
The extended business rate holiday is one of a number of reforms announced that form part of wider push from the government to encourage growth among small and medium-sized businesses in the UK.
The chancellor also announced a £1 billion ‘youth contract’ to subsidise six-month work placements for 410,000 young people. Businesses will be paid up to £2,275 for each unemployed person aged between 18 to 24-years-old that is employed.
Osborne says the move will tackle rising youth unemployment, which the Office for Budget Responsibility forecasts will increase from 8.1 per cent this year to 8.7 per cent next year.
He comments, ‘Youth unemployment has been rising for seven years and is now unacceptably high. It’s little comfort that this problem is affecting all western nations today. The problem is – of course – primarily a lack of jobs. But it is made worse by a lack of skills.
‘Too many children are leaving school after eleven years of compulsory education without the basics they need for the world of work. Our new Youth Contract addresses both problems.’
Osborne has also cut hikes in fuel duty that were due next year and which would have added an extra 3 pence a litre in January and 5 pence a litre in August.
He explains, ‘So despite all the constraints that are upon us, we are able to cancel the duty increase planned for January and for fuel duty from August to be only 3 pence higher than it is now. Taxes on petrol will be a full 10 pence lower than it would have been without our action in the Budget and this autumn.’
Other announcements include a credit-easing programme to underwrite up to £40 billion in low-interest loans to small and medium-sized firms, £1 billion business finance partnership to raise money for medium-sized firms, and an extra £1 billion for the Regional Growth Fund.
A further £250 million support package for energy-intensive firms has been announced, as well as new time limits for planning applications.
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