Written by: Keith Tully
Reviewed: Monday 27th February, 2017
Business rates are effectively a “ticking time bomb” for small businesses throughout England, according to the Labour Party’s shadow business secretary Rebecca Long-Bailey.
Ms Long-Bailey has accused her Conservative government counterparts of mishandling the process of transitioning business rates and suggested that action is needed to prevent “thousands of businesses going under” as a result of business rate increases.
“From delaying the revaluation to their failure to put adequate transitional arrangements in place, the government have mishandled this whole process, and should provide immediate emergency relief,” she said.
“But the reality is that business rates are a ticking time bomb. It cannot be right for smaller town centre retailers to be facing massive hikes while the Amazons and ASOSs of this world have their business rates cut.”
Business ratings and the associated charges to businesses in England are being updated this year for the first time since 2010, with many SMEs expecting to see their overheads increase significantly as a result.
Fears are apparently growing that unless action is taken or emergency support is provided then incoming business rate hikes will see hundreds and potentially even thousands of companies put at risk of bankruptcy.
Earlier this month, prime minister Theresa May said that her government would ensure that there was “appropriate relief” given to businesses who were hardest hit by the impact of changes to business rates valuations which come into effect from April.
A transitional fund worth £3.6 billion has been promised to help firms which face potentially very costly changes to their property-related ratings.
Communities secretary Sajid Javid told the House of Commons last week that he is “working closely with the chancellor to determine how best to provide further support to businesses facing the steepest increases”.
Final details on what financial support will be given by the government to companies hit by business rate rises are expected to be outlined by chancellor of the exchequer Philip Hammond in his Budget speech on March 8th.
Mike Cherry from the Federation of Small Businesses has described business rates as being “an outdated tax” in need of “fundamental” reform and called for politicians from all parties to help and protect those companies likely to be hit hardest by the impending revaluations.
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There was around a 25 per cent increase in the number of restaurant businesses entering insolvency over the course of the year to June 2019, according to the latest figures on the subject.Read More