Written by: Keith Tully
Reviewed: Monday 20th February, 2017
Small companies throughout London are worried about the prospect of seeing significant rises in business rates increase their overheads and compromise their financial sustainability.
That’s according to the results of a recent survey conducted by the Federation of Small Businesses (FSB), which is urging the chancellor of the exchequer Philip Hammond to rethink his policies on the contentious issue of business rates.
Business rates are scheduled to be revaluated across England for the first time in several years from April 1st 2017, with concerns apparently growing about what the potential consequences will be for certain kinds of companies and particularly for small businesses in London.
The FSB’s survey polled dozens of London businesses with 10 or fewer employees and found that the issue of business rates was the primary concern for 74 per cent of respondents.
As many four in 10 respondents said that they expect to see increases of more than 20 per cent in the scale of business rate payments they are obliged to make on an annual basis.
Meanwhile, 31 per cent of the small companies polled said that they simply do not know what impact business rate revaluation could have on their finances.
The FSB is convinced that steep rises in business rates could lead to something of exodus of small firms leaving the UK capital.
“London is in serious danger of losing its vital support system of micro and small businesses,” said the FSB’s London chair Sue Terpilowski in a statement.
“The average micro business will have to find £17,000 to cover business rates from April this year,” she said.
The government has been trying to calm concerns about the impact of its business rate revaluations and has insisted that its changes to the associated regime are all about “making business rates fairer”.
However, a wide variety of trade organisations have raised concerns about the impact that the revaluation could have on thousands of British businesses and about the readiness of the current system to cope with appeals against rate designations.
Properties in England were last valued in relation to business rates in 2010 and almost half of all businesses around the country appealed the ratings they were initially given.