According to the government, tax cuts for Manchester will help to boost the city’s economy and fuel the Northern Powerhouse. From April this year, it is expected that businesses in all of Greater Manchester’s boroughs will see business rates fall, with the exception of companies based in central Manchester. Currently, the UK Government is reviewing business rates nationwide in order to reflect property price changes since the last revaluation was carried out seven years ago. According to analysis carried out by Manchester-based business rates and rent specialists CVS, companies in Manchester centre will face an average rise of just over 4%. However, in Stockport, for example, local businesses will see an expected drop in rates of around 2.5%.
Economic Potential
According to Communities Secretary Sajid Javid, the north of England has huge economic potential. Over the past two years, direct foreign investment into the Northern Powerhouse has more than doubled, and this rate is expected to increase in the future as more investors see for themselves the potential of this area of the UK. But, according to Paul Turner-Mitchell of CVS, in certain parts of Greater Manchester such as Bury, Bolton and Wigan where the business rate fall is less than 1%, it is unlikely that the changes are going to attract larger investment.
Job Creation
In the past year alone, new start-ups and the growth and development of established businesses in the North of England has created almost 100,000 new jobs. Along with this, devolution deals in the past year have brought about a £4bn boost from investments, giving Northern businesses and councils the edge over other locations, turning them into a catalyst for economic growth driving throughout the rest of the UK. Communities Secretary Mr Javid said that this revaluation of business rates will help to ensure that they are accurate, potentially saving Manchester-based businesses hundreds of millions of pounds each year.
No Business Rates
Despite the rise in business rates for those companies based in the centre of Manchester, other businesses in the Manchester area can expect to pay no business rates at all from April 2017. According to the Communities Secretary, this is a move that the Government is hoping to make permanent. The elimination of business rates for smaller businesses in the Manchester area will generate savings, which can then be used for business development costs such as smart hosting, potentially leading to more jobs and a stronger Greater Manchester economy.
Will This Affect Me?
Business rate changes in Manchester are set to come into effect from April. If you currently live, work, study or shop in Greater Manchester, you may notice some changes. For example, whilst prices in the centre of Manchester may rise in line with the business rates, conversely you may see prices drop in other areas of Greater Manchester as company costs decrease. However, unless you are a business owner in the Greater Manchester area or considering starting up your own company, the rate revaluation is unlikely to affect you personally.
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