Truss Weighs UK Business Rates Cut for Firms in Energy Crisis


Liz Truss, the front-runner to be the UK’s next prime minister, is weighing cutting business rates — a form of property tax on commercial premises — for small- and medium-sized companies to help shield them from soaring energy costs.

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Liz Truss, the front-runner to be the UK’s next prime minister, is weighing cutting business rates — a form of property tax on commercial premises — for small- and medium-sized companies to help shield them from soaring energy costs.

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The measure is among a number of options being looked at as Truss scopes out how to protect companies and households from the UK’s cost-of-living crisis, according to five people familiar with the matter, who asked not to be named because the plans aren’t public. 

The foreign secretary’s team has held several meetings with industry lobby groups to discuss the idea over recent weeks, according to one of the people. Businesses suggested increasing the threshold for relief from the rates to properties with a so-called rateable value of £25,000 ($29,115) from £15,000, the person said. Truss was receptive of the idea, which would remove 200,000 companies primarily in Northern England from having to pay the tax, another person familiar said.

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“A decision to take 200,000 SMEs out of the bottom of the tax would help the same businesses facing scary energy bills, while at the same driving growth,” Craig Beaumont from the Federation of Small Businesses told Bloomberg. “It’s a win-win and we’re confident that something is coming.”

Pressure is mounting on Truss and leadership rival Rishi Sunak to detail how they would help both households and businesses deal with soaring energy prices. Energy regulator Ofgem on Oct. 1 will raise its cap on average domestic bills to nearly triple last winter’s level. Businesses aren’t shielded by the price cap, causing them to consider drastic steps to help them cope with full exposure to the wholesale market. 

Slashing rates is considered to be one of the easiest and most direct mechanisms available to help small businesses, and it’s one industry groups have been calling for for some time. Last week, the Confederation of British Industry said business rates should be frozen and that inaction would lead to many viable firms falling into distress. Companies have long wanted the system reformed and the Treasury has had the tax under review for three years.



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