Massive tax rise for small businesses

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Paul Turner-Mitchell warns of a massive tax rise for small businesses

Small Businesses on hard pressed high streets will face an eye watering 20% rise in the business rates that they pay next year.

Business rates for small shops, pubs, cafes and restaurants will rocket as retail relief worth an estimated £417million this year comes to an end.

The average shop will see its business rate bill for this year rocket from £7,567 to £9,140 next year.

The Government announced in the Autumn Statement on 5 December 2013 that it would provide relief of up to £1,000 to all occupied retail properties with a rateable value of £50,000 or less in each of the years 2014-15 and 2015-16.

In the Autumn Statement on 3 December 2014 the Government increased that relief to £1,500 for this year giving struggling businesses a lifeline.

That relief has come to an end and the Chancellor has not sought to extend the same until the next revaluation of business rates in 2017.

September's Retail Prices Index (RPI) figure is of key importance to businesses, and one they look to with great interest as it sets the rate at which rates increase in April. RPI this year has been less than 1%, the lowest since 2009, and in September the figure was just 0.8% percent, meaning retailers in England will now face an additional £60m in business rates next year.

Local business rates expert, Paul Turner-Mitchell warned: “Today's Autumn Statement was terrible for both the retail sector and those who have campaigned long and hard for the meaningful structural reform of the system.

"First there was the manifesto U-turn to report on reform by the end of the year. Then came the scrapping of retail relief followed by yet another increase in a tax already the highest in the world and highly uncompetitive.

"It is a real kick in the teeth and the Government has just simply not listened."

Rochdale MP Simon Danczuk said: “I’m really concerned that high street retailers will be paying over the odds while they wait for the long overdue revaluation.

“This will have a disproportionate impact on Northern towns like Rochdale where rateable values are particularly over inflated.

“Rochdale Council has done an excellent job helping new start up retailers with a rates reduction scheme, but existing traders will suffer because of the policies of this Conservative government.”