Business Rates are Too High, Say 94% of Small Businesses
According to research from the Forum of Private Business (FPB) an incredible 94% of small firms say that business rates are too high.
The news comes as the coalition government passeses the halfway mark in its time in office and the sentiment is that small businesses are not happy with the people in power.
The commercial property tax is probably the most hated of all dues to the government and two thirds of firms said they saw no benefits from their payment of property tax.
Asked about a number of issues, small business were polled on thier opinions of fairness, simplicity, efficiency and certainty in the UK tax system.
Whilst 17% believed that the system was actually improving 28% of business owners believed that, in terms of fairness, the tax system was going downhill.
What doesn’t help matters is when the HMRC publishes a list of tax dodging small businesses, who avoid paying £1million when big business skirts its tax obligations to the tune of £5billlion.
As for whether the simplicity of the tax system, 14% though it had gotten better whilst 25% of business owners belieived it had become more complex.
Again, changes to the tax regime such as Real Time Information (RTI) have not endeared entrepreneurs – Many still remain in the dark about the new system and believe that updating PAYE information with the tax man on a far more frequent basis is a burden to business.
Efficiency in the tax system was another bugbear for businesses. 10% saw an improvement, 25% saw the system getting worse.
Chief Executive of the FPB, Phil Orford, said of the findings:
"It’s probably fair to say that business rates are the most despised of all commercial taxes by today’s small business owner in the UK,"
"It’s a crippling tax that business owners simply have no choice but to pay, and for many who claim to see no discernible benefit to having paid up, it clearly sticks in their craw."
The FPB’s CEO went on to point out that two thirds of hard-working small business owners saw little advantage nor benefit from their business taxes. He cited "bin collections" and road maintainence as entrepreneurs’ money being out to good use but, other than that, there was "…no discrbnabel benefit."
The FPB had even rceieved feedback that some businesses felt that their local authorities were actually stifling business growth.
"It’s evident that business rates are increasingly being viewed as a crude lever to extract cash from hard working entrepreneurs, much of which they’ll never see again. We tend to agree."
Orford had a message for the Chancellor of the Exchequor too, saying:
"This research shows George Osborne really has to consider – and seriously – making a credible concession to small business in the Budget on this moot point. Businesses are clearly unhappy about the spiralling costs of NDR [Non-Domestic Rates – Ed], and we think the tipping point is about to arrive, if it hasn’t already."
The FPB’s CEO then finished on a chilling message:
"If rates keep charging upwards then businesses are going to go bust – it’s as simple as that."
The British Retail Consortium (BRC) added to the FPB’s
Britain’s retailers, still suffering from the effects of two recessions, a weak economy and the threat of online sellers keeping their overheads down, say that the biggest drain on their financial resources have been ever-increading business rates, utilities (Ges, electric, water etc)
calling for Osborne to freeze business rates in the 2013 budget. A study by Oxford Economics for the BRC found that the cost of doing business on the high street has risen by 21% since 2006 and yet sales have increased by just 12%. The major costs facing retailers are business rates, utility bills and rent.