Autumn Statement 2023: small business rates frozen

A £4.3bn support fund for small businesses over five years has been announced, along with the small business multiplier being frozen at 49.9p

Will Drysdale, Reporter, Accountancy Daily

The next tax year will see the fourth consecutive freeze at 49.9p and the standard multiplier will be uprated by September to 54.6p. The small rate multiplier will be increased to match CPI inflation.

For the next five years the government has announced a package worth £4.3bn to aid small businesses by extending the freeze on the multiplier and extending the 75% Retail Hospitality and Leisure relief.

Cash flow implications regarding late payments are set to be ridiculed as firms bidding for large government contracts of £5m will have to prove payments of invoices within an average of 55 days, reducing to 45 days in April 2025 and to 30 in future years.

Danielle Ayres, employment partner at Primas Law said: ‘While the Government also announced a number of positive moves for small businesses today as part of its “Autumn Statement for growth”, including freezing the small business multiplier and making full expensing permanent, it is hard to see whether these will have enough clout to support businesses in the short term.

‘Employers remain under strain to ensure they can support workers given the difficult times, and enhanced support in this area from the Government, rather than placing the emphasis on the organisations themselves to do more is crucial to a growing business economy.’

Vipul Sheth, MD of accounting and auditing outsourcing specialist at AdvanceTrack said: ’The Chancellor’s decision today to make permanent the "full expensing" tax break for businesses will be cautiously welcomed by the business community.

‘It offers a continued incentive for investment, allowing companies to deduct spending on crucial assets from profits and ultimately reduce their corporate tax burden - particularly valuable to profitable businesses. That’s in addition to a valuable window for strategic tax planning, enabling businesses to optimise their investments and enhance cash flow.

‘Businesses will be hoping it helps stimulate growth and job creation, however I would have liked to see him go even further and increase the allowance for Entrepreneurs' Relief. It was previously unlimited, but successive Chancellors have reduced it to just £1m.

Implementing any policy that does not encourage entrepreneurship will make the country poorer. Rather than a fat cat tax, the people who make use of it are predominantly small business owners, many of whom have worked for decades and come to sell their business at retirement.

Flora Barnes, corporation tax director at RSM UK said: Whilst the 10% increase to the national living wage is good news for employees, it is less good for employers at a time when the burden on business is significant. While the cut to employee national insurance rate benefits workers, there was no corresponding cut to employer national insurance. The cost of the pandemic, energy cost hikes and the continuing inflationary and interest rate pressures being felt, have the potential to hamper business growth.’