But businesses with offices in England and Wales are now facing a government stealth tax.
Pressure is mounting on the government to abolish the new staircase tax, which ITT has warned will hurt many thousands of small companies. A new court ruling means firms occupying multiple floors in a building that houses more than one tenant are charged more.
This is on top of new rateable values for business rates on commercial properties that came into effect in April, imposing a £909 million annual tax increase for offices, according to business rates advisory firm CVS.
The staircase tax has been derided as “unfair and irrational” by Sir Vince Cable, the Liberal Democrat leader and former business secretary, and has been condemned by MPs from all parties.
Small businesses in England were told in the March budget that they would be given a share of £300 million of emergency relief to ease the burden of higher rates, but thousands of companies are still waiting for their emergency relief payment.
As if to make matters worse, the governor of the Bank of England, Mark Carney, said last week that interest rates will have to rise shortly. He claimed that Brexit has dealt Britain an economic blow that will drive inflation higher. As a result, Carney sought to prepare businesses for higher borrowing costs, and this means that market borrowing costs used to price mortgages, overdrafts and other consumer credit will rise automatically.
The only good news over the past week or so is that, as a result of Carney’s comments, the pound jumped immediately by four cents against the dollar.
Let’s hope that as prime minister Theresa May’s plans for Brexit become clearer we’ll see a renewal of confidence in sterling, which will at least be good news for those tour operators and travel agents specialising in the outbound sector.
