Liz Truss, the current front-runner to be the UK’s next prime minister, is debating a cut in business rates for SMEs to help with soaring energy bills.
According to news channel CNN, her team has met with several lobby groups to discuss the idea, with some experts suggesting an increase in the Rateable Value (RV) threshold to qualify for relief. Media speculation says the threshold could increase from current £15,000 up to £25,000.
If adopted, the move would take around 200,000 companies, primarily across the North, above the threshold for paying business rates.
The measure is among a number of options being looked at by Truss who refuses to be drawn publicly into detailing how she plans to protect companies and households from the UK’s cost-of-living crisis – and that is assuming she is successful in the race to claim the Tory leadership today (Monday). All the polls suggest she is way ahead of fellow Cabinet rival Rishi Sunak.
Pressure has been mounting throughout the six weeks of campaigning on both Truss and Sunak to detail how they would help households and businesses deal with energy price hikes. On October 1, energy regulator Ofgem is expected to raise its cap on average domestic bills to nearly triple last winter’s level. Reports are already surfacing of businesses – including several pubs in the Brewdog chain – closing due the soaring energy bills and that is before winter bills start to bite.
Raising the threshold of the Rateable Value could be one of the easiest and most direct ways to help SMEs, following on from the Confederation of British Industry (CBI) last month which called for business rates to be frozen.
Craig Beaumont from the Federation of Small Businesses also welcomed the initiative stating: “A decision to take 200,000 out of the bottom of the tax would help the same businesses facing scary energy bills, while at the same driving growth. It’s a win-win and we’re confident that something is coming.”