Business Rates Need to Be Addressed in Budget

Business ratesBusiness groups the Federation of Small Businesses (FSB) and the Forum of Private Business (FPB) are calling for action to be taken on business rates ahead of next week’s budget.

Business rates have been increasing at their highest pace in recent years and the latest from the small business community is that 94% of SMEs think that business rates are too high.

The FSB and FPB both want George Osborne to take action on business rates in next week’s budget which happens on Wednesday 20th March.

The Forum of Private Business wants the chancellor of the exchequer to scrap any further business rate rises for the year.

The Federation of Small Businesses want George Osborne to make the Small Business Rates Relief a permanent fixture in England; their argument is that some small firms pay more in business rates than they do in renting their premises.

Both the FSB and the FPB are pushing for changes in the method with which business rates are calculated too. The FPB have said that linking business rates to inflation has been problematic, seeing a 5.6% increase last year, and that rises should be capped at 2% for the next two years.

The FSB want this to be a “budget for small firms” with the business organisation’s national chairman, John Walker, saying:

“What we need to hear on 20 March is not more small-scale policies which tinker at the edges, but measures that will have a tangible effect both immediately and in the long-term. That is why we have asked for a review of enterprise policy, to ensure the right initiatives are in place that really do help small firms start up and grow.”

The FPB’s head of policy, Alex Jackman, chimed in, adding:

“Business rates are one of the major costs faced by British businesses. RPI has been running at an extremely high rate and as a consequence businesses were faced with a 4.6% increase in 2011, a 5.6% increase in 2012 – the highest for 20 years – and now a proposed 2.6% increase this April. By scrapping business rate rises this April and capping them at 2% over the following two years, the government can help with both cash flow and certainty for financial planning.”

In addition to making business rates relief permanent, the FSB are calling on the Chancellor to simplify the tax system and improve access to finance for small businesses.

The FPB want tax breaks to encourage alternative forms of finance such as crowdfunding, with the business group saying that George Osborne needs to be more creative with his next budget.

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