Transcript Conclusion of the Business Rates Review Relief for Small Businesses

POLICY UPDATE
MARCH 2016
OJAY MCDONALD
BUDGET 2016
Conclusion of the Business
Rates Review
Relief for Small Businesses
Permanent doubling of threshold for Small
Business Rate Relief (SBRR) from April 2017.
Businesses with a rateable value of £12,000 or
less will pay nothing.
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Conclusion of the Business
Rates Review
Relief for Small Businesses
If rateable value is between £12,000 and
£15,000 businesses will receive tapered relief.
Increase of threshold for the standard
multiplier to a rateable value of £51,000.
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Conclusion of the Business
Rates Review
Changes to Calculation
A switch in the measure of inflation from RPI
to the lower CPI.
Revaluations to be more frequent – no more
than three years apart.
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What George Giveth,
Could He Taketh Away?
Conclusion of the Business
Rates Review
Business Rates Retention
Are the generous offerings from the
Chancellor really that generous when he
doesn’t have to pay for them?
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Conclusion of the Business
Rates Review
Business Rates Retention
Treasury will consult on compensation for
local govt this Summer.
ATCM is likely to respond saying that local govt
should receive compensation and this should
come from additional revenue from tax
evasion/avoidance.
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Conclusion of the Business
Rates Review
This is good news, but is still not the
wholesale tax modernisation required.
Fundamental weakness in business tax system
with exposure to digital economy still exists.
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Other Budget
Announcements
• Up to £1.8 billion being allocated through a
further round of Growth Deals with Local
Enterprise Partnerships later this year.
• The next round of the Coastal Communities
Fund, for projects starting in 2017-18, will
open for applications this summer.
• Corporation Tax down to 17% by 2020.
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Other Budget
Announcements
• Mayoral devolution deal agreed with East
Anglia. New powers over transport,
planning, skills, a £900 million investment
fund over 30 years to grow the local
economy, and access to £175 million for
new homes.
• Delivery of a 5G strategy in 2017.
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Other Budget
Announcements
• The National Infrastructure Commission
will report on priorities needed for growth,
housing and jobs in the Cambridge-Milton
Keynes-Oxford corridor.
• New powers for HMRC to ensure online
retailers pay VAT .
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Implications of Brexit
on Town Centres
Impact of Brexit on East’s
Economy
On the 23rd June, UK will go to the polls to
vote on EU membership.
Objective information on the impact for town
and city centres is hard to find.
ATCM is developing a briefing paper to
support members.
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If We Vote to Leave….
….UK Government will trigger ‘Article 50’ of
the Treaty of the European Union.
The UK would remain a member of the EU for
a minimum two years before it’s status is
revoked.
Whether the UK is better off or not depends
on negotiations during this period.
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If We Vote to Leave….
The default status is that we would have:
• No representation in the European
Parliament.
• No access to the Single Market.
• No requirement to permit the free
movement of EU citizens.
• No requirement to conform to EU rules and
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regulations.
4 Key Areas for Town
Centres
• Economy
• Tourism
• Regulation and Policy-Making
• Financial
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ECONOMY
Single Market
Single market is huge force in the global
economy.
It removes cross border barriers to trade like
tariffs and customs control.
Exporting and importing is much easier.
No guarantee that UK can negotiate access to
Single Market following withdrawal.
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Trade
44% of all UK exports go to the EU.
This supports 12.6% of GDP.
All trade agreements with countries outside
the EU be scrapped and would need to be
renegotiated from scratch.
Uncertainty could be intolerable for some
businesses.
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Source: ONS
Investment & Employment
EU membership boosts FDI by 27%.
This implies that a loss of access to Single
Market will mean huge drop in investment.
Knock-on impact on employment and local
economies.
Source: OECD
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Investment & Employment
Special concern for:
•City of London
•Manufacturing
•UK’s Relationship with Ireland
Source: OECD
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Best of Both Worlds?
Q: Can we leave the EU but retain access to
the Single Market?
A: Yes! Countries like Norway and Switzerland
do this.
Q: Is there a catch?
A: Access is limited, requires contribution to
EU spending, subject to EU legislation, free
movement
of people and no vote in EU.
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Assessment
Impossible to guess the economic future of
the UK outside of the EU.
However, very strong economic arguments for
staying in the EU. The uncertainty alone could
cost investment in the UK.
ATCM categorises the impact
of Brexit on the economy as
negative.
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TOURISM
Free Movement of People
The free movement of people is a key feature
of the Single Market.
It means minimal visa and border controls.
Add to this the rise of budget airlines and train
links with the continent.
This has meant huge opportunities for UK
tourist destinations.
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Free Movement of People
34 million inbound tourists expected this year.
64% will be from Europe.
The reintroduction of visa and border controls
will harm this.
Business travel will also be affected.
This sounds like a potential disaster, but the
situation could be more complicated than this.
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Double-Edge Sword?
EU withdrawal could make it more difficult for
inbound tourists to visit the UK.
However, the same would be true for
outbound tourists.
UK holidaymakers might decide to stay in the
UK and visit home-based tourist destinations.
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Double-Edge Sword?
Would this be enough to offset loss of EU
visitors? Not sure.
But, EU withdrawal could also mean the slide
of the pound.
Downward pressure on sterling has double
benefit of making the UK cheaper for foreign
visitors and making foreign destinations more
expensive for British tourists.
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Assessment
Free movement of people has been a huge
boost to UK tourism. It loss will mean less
foreign visitors
However, this might also mean more UK
holidaymakers staying in the UK. Plus, a
weaker pound would be good for tourism.
ATCM categorises the impact
of Brexit on the tourism as
neutral.
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REGULATION & POLICYMAKING
Lack of Sovereign Control
Over Law-making
The UK Government, Parliament and the
Devolved Administrations lack 100% over lawmaking.
This has downsides, for example:
• VAT
• Pedlars
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Place-Based Policy-Making
Place-based policy-making is the holy grail for
the town centre management industry.
We are no where near this in the UK.
The EC is much more progressive. It has
announced the development of a EU Urban
Agenda.
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EU Urban Agenda
Urban Agenda will bring together a range of
policies to understand how they overlap with
‘place’ such as:
•Education & Culture
•Transport
•Energy
•Information Society
•Environment
•Climate Change
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EU Urban Agenda
3 possible functions of the Urban Agenda are:
•Develop policy at a European level aimed at
supporting towns and cities
•Impact assessment on all policies to ensure
that they support towns and cities
•Support Europe’s town and city leaders to
network and share best practices.
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Tax Reform and Global
Business Trends
Modern Global Business Structures
+
Digital Economy
=
Tax Evasion/Avoidance
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Tax Reform and Global
Business Trends
Property based businesses pick up the bill
through business rates.
High street businesses carry a heavy burden.
EU to tackle tax evasion/avoidance.
International collaboration is essential.
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Assessment
EU withdrawal means the repatriation of all
law-making to the UK.
However, EU is more advanced in place-based
policy-making and town centres and high
streets are influenced by global business
trends.
ATCM categorises the impact
of Brexit on the policymaking as negative.
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FINANCIAL
The Figures
Gross Cost of EU Membership:
£18 billion
Money Repatriated to the UK:
£9 billion
Net Cost of EU membership:
£9 billion
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Source: Institute for Economic Affairs
EU Structural Funds
The money that comes back through the EU
Structural Funds (European Regional
Development Fund and the European Social
Fund) makes a big contribution to towns and
cities across the UK.
But is £9 billion too big a cost considering the
squeeze on public spending?
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Assessment
The annual cost of EU membership is £9
billion.
This is a problem considering the squeeze on
public finances.
ATCM categorises the impact
of Brexit on the funding as
positive.
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SUNDAY TRADING
IT COLLAPSED!
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VISIT ATCM.ORG
FOR MORE
INFORMATION
[email protected]
@Ojay
07976636038