01/04/2009 - Business rate increase scrapped
Plans to increase business rates by 5% next month have been scrapped by Chancellor Alistair Darling, who has instead limited the hike to 2%.
He announced in the Commons, over the next two years the remaining 3% rise will be spread out to offer "real and genuine help" to firms.
Due to come into effect this week, there had been widespread anger in the business community over the 5% rise. But the move will allow firms to defer some £600m of taxes due to be paid this year.
The Federation of Small Businesses (FSB), immediately hailed the announcement as a "good start".
However, John Wright, FSB chairman urged the Chancellor to go further in next month's Budget. He said: "There is more room for manoeuvre on business rates especially the need to introduce automatic small business rate relief for eligible small firms."
Mr Darling said: "I believe this will provide real and genuine help for businesses in this country. Indeed, 1.5 million properties will gain from this and it will defer about £600m."
Copyright © Press Association 2009
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