// Possible change in business rates threshold would provide relief for many SMEs
// Boss of Ovo Energy puts forward radical new plan as Truss team looking at subsidy proposal
Business rates could be slashed under plans from Liz Truss, the Conservative leadership frontrunner.
It is thought the government could raise business rates relief for premises with a rateable value of £15,000 to those valued at £25,000, meaning many thousands more companies would be spared from the tax.
Truss’ team has been discussing the proposals with industry lobbyists as she prepares for the likelihood of being made Prime Minister next week by Tory members.
Nadhim Zahawi, the Chancellor, has also met with representatives from industry groups this month amid widespread calls for business rates reform.
The news comes as the founder of Britain’s third-largest domestic energy supplier called for a subsidy scheme in which households would receive an allowance of cheap energy, then be charged much higher rates for anything used above that level.
Writing in the Telegraph, Stephen Fitzpatrick, of Ovo Energy, said his plan would benefit the poorest households while keeping incentives for consumers to cut consumption.
Following months of extremely high wholesale gas costs, the price cap on average energy bills is to climb by 80% to £3,549 in October.
Small businesses are facing an even bigger crisis next month, when many corporate energy contracts will also come up for renewal with no price cap to protect them from surging wholesale markets.
Many could see a fivefold rise in their costs.
Truss’ team is understood to be receptive to the idea of expanding business rates relief, with more companies likely to be eligible for support in the North and Midlands than around London.
Craig Beaumont, of the Federation of Small Businesses (FSB), said: “We are increasingly confident that business rates are on Liz Truss’ radar. We like that she’s talked about small businesses and self-employed individuals, and the decisions on National Insurance contributions.”
The FSB said businesses have already been hit by a 424% increase in gas costs and a 349% rise in electricity since February 2021.
Meanwhile, the UK hospitality industry has said thousands of pubs will shut down unless they get immediate access to government support to soften the blow of rising operational costs.
The British Beer and Pub Association has written to both Truss and her rival Rishi Sunak, who has also promised reforms, to say there will be mass job losses in the coming months without government aid.