Plea to chancellor to freeze business rate rises in spring statement
PUBLISHED: 08:36 26 February 2018 | UPDATED: 09:45 26 February 2018
Experts are urging Philip Hammond to freeze rises in business rates in next month’s spring statement after figures revealed almost a quarter of a million commercial premises are braced for above-inflation hikes.
More than 242,000 firms face a rise of more than 3% in their business rates from April, with 52,000 set for increases of more than 20%, real estate adviser Altus Group found.
It comes despite Mr Hammond’s pledge in the November Budget to bring forward a planned switch in the inflation measure used to calculate annual increases – to the lower consumer price index (CPI) of 3% – from 2020 to this April.
But due to phasing in of recent revaluation changes – which saw crippling rate hikes for thousands of firms – many businesses are set for rises far greater than inflation.
Alex Probyn, president of Altus Group, said it was “not too late” for Mr Hammond to freeze further rises in rates in his spring statement.
He said: “The past few months have seen a stream of collapses across both the retail and hospitality sectors with many others teetering on the brink or considering large scales closures.
“Historically, the spring is when chancellors have made key fiscal decisions so it’s not too late for a freeze in inflationary rises to help cushion the blow for those in transition amidst challenging trading conditions.”
Analysis of government data by Altus found that 119,665 small premises, 110,502 medium sized premises and 12,107 large premises will all see tax rises greater than last September’s 3% CPI rate – totalling business rate rises of £712.75m.
The phased-in transitional relief also means 52,483 properties will see rises in their rates bills of more than 20%, while 9,235 will see rises of more than 30%.
Business rate hikes have been blamed for adding pressure to firms in the retail and leisure sector in particular, with celebrity chef Jamie Oliver the latest to fall foul.
His restaurant chains have been hit by huge bill rises, forcing him to close one of his London Barbecoa eateries and buy out the other in a rescue deal.
Recent figures showed the government is set to cash in to the tune of £25bn as it reaps the rewards of last year’s controversial business rates revaluation.
The amount of money raked in from businesses by local authorities in England is set to rise by £845m to £24.8bn for 2018/19.
The business rates overhaul on April 1 saw 1.9 million properties in England revalued and left many businesses facing eye-watering increases.
If you value what this story gives you, please consider supporting the Eastern Daily Press. Click the link in the orange box below for details.