16th Apr 2012
One of the biggest disappointments of this year’s budget has been the increase in business rates. In this difficult economic climate, the Government should be reducing the overall burden of taxes on businesses. However, despite a reduction in Corporation Tax, the Chancellor has allowed the highest RPI increase in 20 years (5.6%) to decide the rate at which business rates will increase by, and this will have a hugely detrimental impact on UK businesses.
A recent survey by The London Entrepreneurial Exchange found 52% of 400 small businesses said they would have preferred the Chancellor to have cut business rates. Business rates often represent the third largest overhead after rent and wages, many firms will simply be unable to afford the rise and many may have to cease trading as a result of the hike. Whilst the rateable value of a property is fixed in 5 year blocks, the multiplier that determines the rates bill can – as most business owners are discovering – significantly increase.
However, business rates can be appealed and it is prudent that all businesses undertake a review of their rateable value to assess the possibility of achieving a reduction through appeal. If the appeal is successful, the business owner can receive a rebate back to April 2010 (providing they have occupied the premises since this date) and a lower rates bill moving forward. This can make the difference between a business continuing to trade or folding.
When every penny counts, it is important to challenge the increases in rates bills that threaten the business community.
Mark Touhey is Head of Affiliates at CVS (Commercial, Valuers & Surveyors) UK Ltd