A number of measures related to business and business tax were announced.

New cap on business rates increases

It has been confirmed that a new cap on business rates increases will be introduced in England next year.

Business rates, which normally rise with inflation, were set to increase by 3.2% next year in line with September’s retail price index. However, following the announcement, increases in business rates will now be capped at 2% in 2014/15.

Businesses will also be allowed to pay their rates in 12 monthly instalments.

Business rates discount

The Chancellor announced additional support for the retail sector through the introduction of a £1,000 business rates discount in 2014/15 and 2015/16. It will apply to retail properties, including pubs, cafes, restaurants and charity shops, with a rateable value below £50,000.

The Government will introduce a 50% business rates reoccupation relief for 18 months up to the State aid limits for businesses that move into retail premises that have been empty for a year or more. Businesses which move into empty premises between 1 April 2014 and 31 March 2016 will be eligible for the relief.

Small Business Rate Relief extended

The temporary doubling of the Small Business Rate Relief (SBRR) was due to come to an end on 31 March 2014. It will now be extended for a further 12 months to April 2015.

Under the scheme, small businesses with a rateable value of £6,000 or less currently receive a 100% rebate on their business rates.

This relief gradually reduces from 100% to zero on a sliding scale for those small businesses with a rateable value of between £6,001 and £12,000. For businesses with rateable values of between £12,001 and £17,999 a lower business rates multiplier applies.

The Government will relax the SBRR rules to allow businesses in receipt of SBRR taking on an additional property to retain SBRR on the first property for one year, with effect from 1 April 2014.

Start Up Loans

An additional £160 million over six years has been committed to the Start Up Loans programme, which is designed to provide loans and mentoring to budding entrepreneurs.

Business lending

There have been two recent announcements expanding on the Government’s support for lending to small and medium-sized businesses.

The first, by Deputy Prime Minister Nick Clegg, was that a further £250 million is to be made available to the new British Business Bank, currently being formed in Sheffield – an addition to the existing capital of £1 billion. The Bank is expected to be fully operational by Autumn 2014 and Government forecasts put the additional lending and investment it will create at £500 million a year.

The Bank is also taking over management of £2.9 billion worth of existing commitments, and has said that it will ‘unlock £10 billion of extra funding in the next five years’.

The second announcement concerns a re-focussing of the Funding for Lending scheme, launched in July 2012, to provide banks with cheap, state-backed funding as a means of increasing lending to homebuyers and small businesses.

The Bank of England has concluded that the upturn in the housing market means there is ‘no longer a need’ for the scheme to support household lending, so although banks will be able to continue to draw on already-set allowances for 2014/15, only business lending will qualify for future allowances.

Film and theatre reliefs

Subject to State aid approval, from April 2014 the rate of film tax credit for surrenderable losses will be 25% on the first £20 million of qualifying core expenditure (subject to a maximum of 80% of qualifying core expenditure) and 20% thereafter (to a maximum of 80% qualifying core expenditure). The minimum UK expenditure qualification will also change from 25% to 10%.

A consultation will be launched in Spring 2014 on the introduction of a limited corporation tax relief for commercial theatre productions and a targeted relief for theatres investing in new writings or touring productions to regional theatres.

Measures for young people

The Chancellor placed a great deal of emphasis on measures designed to help young people entering the workplace:
Employer NICs for under-21s

In a move designed to encourage businesses to employ young people, from 6 April 2015 employers will no longer be required to pay Class 1 secondary NICs on earnings paid up to the Upper Earnings Limit to any employee under the age of 21. This will apply to both existing employees and to employers taking on new staff. No individual’s state pension entitlement will be affected by the measure.

Higher education and apprenticeships

The cap on student numbers at publicly-funded higher education institutions in England will be removed by 2015/16. This will allow institutions to meet demand from an estimated 60,000 young people who have achieved the grades to enter higher education but cannot currently secure a place.

An additional £40 million will be provided to create an extra 20,000 higher apprenticeship starts, over the next two academic years. The Government has also announced its intention to enable employers to receive funding for the training costs of apprentices directly, through an HMRC-led system.