LONDON (Reuters) – Britain’s finance minister Rachel Reeves said on Thursday she would look at reforming business property taxes to make it easier for smaller firms to expand, as she seeks to step up efforts to boost growth.
As her annual budget on November 26 approaches, speculation about tax increases and worries over inflation are already weighing confidence among some businesses and households.
Many economists think Reeves will need to find tens of billions of pounds more in revenue due to higher borrowing costs, a less certain growth outlook and a failure to pass welfare cuts through parliament.
“Our economy isn’t broken, but it does feel stuck,” Reeves said alongside a finance ministry report into business property taxation, known as rates.
The report proposed smoothing out big jumps in property taxes faced by small businesses when they expand.
“Tax reforms such as tackling cliff-edges in business rates and making reliefs fairer are vital to driving growth,” she said in a statement.
Also under consideration are changing how the tax is calculated and enhancing tax reliefs when the value of a property is increased through improvements.
Further details would be published in the budget, it added.
Helen Dickinson, chief executive of the British Retail Consortium, welcomed the plans but said it was more important for the government to confirm a details of a promised reduction in rates for retail, hospitality and leisure businesses.
“Until we get clarity on these changes, which isn’t expected until the budget, many local investments in jobs and stores are being held back,” she said.
(Reporting by Muvija M, writing by Sarah Young; Editing by Kate Holton and David Milliken)
