Chancellor George Osborne announced devolution plans for business rates at the recent Conservative Party conference in Manchester, which could have a major impact on flexible workers and micro businesses.
The new plans would mean local councils would be responsible for taxing businesses, which could generate more than £26bn for services for the local communities. This would reduce the dependence on central government and encourage professionals, councils and businesses to support each other and reap the rewards.
It would also enable councils to lower the business taxation rate, which would be a boon for contractors and freelancers who operate within shared workspaces and work hubs. Local authorities currently keep 50% of the rates collected and they would not be able to raise them, expect in very rare circumstances.
Local councils have not indicated whether they are planing to reduce these rates when the government devolves tax rates but many could see it as an ideal means to encourage new SMEs and other workers to come to the area.
IPSE policy director Simon McVicker said: “We hope local councils recognise the value the self-employed contribute to the economy. Councils can support them by ensuring competitive business rates for work hubs and shared workspaces.”
He continued: “These spaces are vital entrepreneurial communities where independent professionals can develop their businesses in a supportive environment with their peers.”
The chancellor’s speech also included an announcement for a National Infrastructure Commission, which is encouraging for construction contractors; however, Mr Osborne failed to touch on subjects affecting the self-employed such as the convoluted tax system and the costs of doing business.