Research has revealed that the UK’s small business community is backing measures to simplify business rates.
A total of 71 per cent of the small businesses surveyed, by Close Brothers Asset Finance, said business rates should be simpler and that the system should have a greater level of flexibility.
Meanwhile, 49 per cent of SMEs said the Government’s efforts to assist with business rates relief are not sufficient, whilst just 36 per cent reported being satisfied with its approach.
“The message from SMEs is clear that more needs to be done,” said Neil Davies, CEO of Close Brothers Asset Finance.
“Our study has found that it’s a nuanced picture out there and what I mean by that is that the call for clarity is not driven entirely by cost concerns.”
In the last year, business rates have hit the headlines more than once and very rarely for the right reasons. Here we briefly recap the timeline of events:
Following the most recent revaluation, many businesses anticipated a sharp rise in business rates. In the Spring Budget (8 March 2017) the Chancellor pledged to support small businesses who faced a dramatic increase in their business rates bills. The provisions promised included a £25m fund, a further £300m discretionary hardship fund, a special relief intended for pubs and a cap on rate increases for those losing small business rate relief.
Delayed implementation of provisions left around 25,000 business in limbo. The Government intervened to try and speed up the process. Software companies Capita, Civica and Northgate Public services were given a deadline of 21st August, by which time they must have provided local councils with the software updates necessary to produce new bills.
The relief package outlined in the Spring Budget continues to be plagued by lengthy delays and generally negative commentary, with many bills yet to be revised. The RPI rate of inflation reaches 3.9 per cent, meaning many businesses will face rates bills above UK inflation in April 2018.
Business rates appeals decline drastically following the introduction of the ‘Check, Challenge, Appeal’ system, which was introduced in April 2017.
Many businesses face continuing rising costs and are yet to reap the benefits of the latest revaluation.
Small businesses call for a simpler system.
Whilst we should acknowledge that some concessions have been made, following concerns from SMEs, such as bringing forward the next business rates revaluation from 2022 to 2021, it is clear there is still work to be done.
Those small businesses that make up our high-streets have been some of the worst affected and now, The British Retail Consortium has called (BRC) for rates to be frozen for two years.
Helen Dickinson, BRC chief executive, commented: “Business rates are outmoded and outdated. They were created in the last century and are not fit for purpose in the 21st century.”
Martin Williams, Partner at George Hay, said: “It would seem fair to say that the Government has not been properly supporting small businesses of late.”
“With bills getting bigger and the business rates system more convoluted than ever, there will invariably be issues for SME’s.”
“The Government should ensure that the process of getting rates bills right is as failsafe as it can be, they should ensure that businesses have a fair shot at challenging rates they believe to be incorrect and they must consider further reform if the system is to meet the needs of our modern society.”
Are you a business owner currently faced with an uncertain future? Seeking professional advice from trusted advisers, such as ourselves, may be the first step towards understanding exactly where you’re headed. We can work with you to put realistic plans in place, that will cultivate confidence within your business and ultimately facilitate growth. Call or email us today to discuss your circumstances in more detail with one of our experts.