How small businesses can cut their tax bill

Thousands of small shops, restaurants and pubs could miss out on valuable discounts on business rates as local authorities are applying new rules in different ways. The confusion follows an initiative by the chancellor, Philip Hammond, to help retailers and other high-street outlets, which have seen a spate of closures in recent years amid pressures such as competition from online rivals and rising costs. In last October’s Budget, Hammond said that many smaller retail businesses – those whose properties have a rateable value of less than £51,000 for business-rates purposes – would see their business-rates bills cut by a third in the 2019-2020 and 2020-2021 tax years. However, while the cost of the discount will be covered by central-government funding, the rates system is administered by local authorities. And while some have computer systems capable of automatically applying such discounts to any business that is eligible, others are using legacy IT systems that are not so flexible.