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By most accounts, it was a low-key Budget. But Chancellor Philip Hammond might have done enough to dispel fears about business rate rises – for now

09 Mar 2017 by John White

"For practice owners, business rates are particularly galling” says consultant at Myers La Roche, Dominic Watson, when OT  asked for his take on the planned changes in February.

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Fast-forward a month to the Spring Budget, and the fact that the Chancellor appears to have listened to the concerns raised on business rates, and offered a plan in his statement yesterday, was key.

For the Federation of Small Businesses (FSB), the £435m of relief fund money represents a “direct and much-needed response to those facing hikes in their business rates. This immediate relief is vital in the short-term, and action on more frequent revaluations will also help."

However, the FSB could not resist offering the caveat that the rates tax itself remains out-of-date and is not fit for purpose.

When OT asked Mr Watson for his wider view on the reality of rises, he noted that, for a small number of independents in London and the South East facing the largest rate rises, the increase genuinely could bring business viability into question – "but the blame is likely to be with a fundamentally flawed operating model, with the practice sailing far too close to the wind prior to rate rises."

While news of an additional £2bn for social care has caught the attention of many, the sting in Mr Hammond's budget appears to be less welcome news for the self-employed.

For Class 4 National Insurance contributors, National Insurance is set to rise to 10% next year and 11% in 2019.

As with the business rates storm, the Chancellor can expect a fight back, as the move is characterised by the FSB among others as "a tax grab on middle income self-employed people, who are just about managing."

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